The uncertainty of future education requirements
What is the value of a bachelor’s degree? A report released last week by Anthony P. Carnevale and coauthors at the Georgetown Center on Education and Workforce renewed the debate on exactly this question. The report argues that education has been an important form of insurance during the recent economic downturn. In particular, for those with a bachelor’s or higher, employment continued to grow even during the Great Recession.
However, Lawrence Mishel, Dean Baker, and Dylan Matthews criticized this claim. It turns out that it matters a great deal how we categorize people. If we think of “bachelor’s or higher” as one group, then job growth appears very strong—187,000 jobs added during the recession and an additional 2 million jobs added during the recovery. However, 98.3 percent of those job gains went to those holding an advanced degree. And if we put the job numbers in context by comparing them with the size of the labor force, we see that unemployment rates for workers of all education groups have roughly doubled.
So is the bachelor’s degree a great investment or is its value overstated? Whether we choose to look at wages, job prospects, or some other measure, I would argue for people deciding now whether to obtain a four-year degree that the historic track record of the bachelor’s degree matters only in so far as it predicts future performance. But that’s exactly the problem. If policy wonks can’t agree on the value of a degree right now, it makes it even more difficult to get a consensus for what it will be worth years from now.
Can we at least get some idea of jobs the economy might add in the future and what the typical education requirements for those jobs will be? Every two years, the Bureau of Labor Statistics (BLS) releases a 10-year projection of employment growth across detailed occupations. The latest projection is from 2010 and looks at what employment might be in 2020. (In recent work with Pam Loprest, we have developed our own employment projections through 2017 for both the national and metro levels. I use the official BLS projections here.)
Below I have reproduced a list of the 30 fastest-growing occupations along with typical entry-level education requirements.
You may notice something surprising. Out of 30 occupations, only 2—elementary school teachers and accountants—require a bachelor’s degree. A similar story emerges if occupations are instead ranked by fastest growing in percentage rather than absolute terms—only 6 out of 30 require a bachelor’s degree. On the other hand, if we zoom out from the fastest-growing occupations and consider job growth across all occupations, jobs requiring a bachelor’s degree are projected to grow 16.5 percent. This looks favorable when compared with overall job growth of 14.3 percent. To add one final wrinkle, Carnevale has previously argued that BLS projections underestimate the rising demand for education so that jobs requiring a bachelor’s degree may grow more than BLS says they will.
So what should we conclude from the contrasting evidence? There is considerable uncertainty about the future value of the bachelor’s degree (or any other education credential). This uncertainty stems in part from the uncertainty of predicting the future direction of the economy. But it also stems from more subjective factors, such as how different people view the labor market or what a job requirement in 2020 really means.
I would suggest that in an uncertain world, efforts to stem the rise in tuition costs will not only benefit students directly, but also make the downside risk of obtaining a degree more manageable.