Worldwide college rates pass us by

There’s a lot to celebrate in not being the worst. The United States’ education system has taken a beating on the international stage over the past decade, but, according to the latest report on the state of education in the world, we’re not terrible. We are, however, stagnating while other industrialized countries move ahead. To paraphrase Woody Allen, the relationship between education and global competitiveness is like a shark: “it has to constantly move forward or it dies. And I think what we got on our hands is a dead shark.”

That’s harsh, but consider this figure from Education at a Glance 2011, published this morning by the Organisation for Economic Co-operation

Countries's share of higher ed degrees by age group (from OECD report) click to enlarge
Countries’s share of higher ed degrees by age group (from OECD report) click to enlarge

and Development (OECD). Of the 39 million 55- to 64-year-olds around the world with college degrees, more than a third are in the United States. Those are the highly educated baby boomers. But the number of people attending college has been increasing rapidly worldwide and now there are about 81 million college graduates between 25 and 34 years old. Of that group, just over 20% are Americans. At the same time, China’s proportion has tripled.

“The one thing that you see today if you just look across age groups, the United States is quite alone in that young people entering the labor market are not better educated than the people leaving the labor market,” said Andreas Schleicher, head of OECD’s Indicators and Analysis Division. “There’s nothing that points to a decline – the United States is actually growing its college completion rate – it’s just that the growth rate is not as high as other countries’.”

California‘s labor gap

While the United States is falling behind other countries, California is lagging behind other states in much the same way. Among baby boomers, 35% have a bachelor’s degree or better. That dips to 27% of 25- to 29-year-olds, according to the Public Policy Institute of California.

The PPIC report, “Closing the Gap: Meeting California’s Need for College Graduates,” estimates the state will have one million fewer college graduates than it needs when the boomers retire. To fill all the skilled jobs, we’ll need 60,000 more baccalaureate degrees per year by 2025.

Getting to this sluggish point is sort of a classic Tortoise and the Hare fable. “Other countries have taken the U.S. model of investing in schools more seriously than we have,” said Hoover Institution Senior Fellow Eric Hanushek, adding that that doesn’t bode well for our economic health.

“What we’re finding is we’re becoming less and less competitive in terms of human capital and schooling and it’s going to come back to haunt us,” said Hanushek.

Hold on, the decent news is coming

The drop in degrees is not just about being too complacent. There are other trends in the United States that harm our global position.  College is very expensive; average tuition is higher than any other country.  “The United States really is in a class by itself in the price of higher education,” Schleicher says, although he acknowledges there’s no hard data to prove that this is causing the decrease in college graduation rates. [*See correction below].

And here’s a humorous point, according to OECD statistics, the reason for the higher fees and smaller public support is that we pay low to average taxes

Costs of higher education around the world (from OECD report) click to enlarge
Costs of higher education around the world (from OECD report) click to enlarge

(emphasis added) compared to most developed nations, so the cost of college falls hard on families and students run up tens of thousands of dollars in loans that cut into their future earnings.

It’s not a lost cause for the United States, however, not even close.  The 500-page OECD report is a treasure trove (overused term, but true in this case) of amazing statistics and many of them place the U.S. in good standing.

  • 99% of our K-12 teachers meet state qualifications.
  • Even though classroom instruction time has taken a hit, we still exceed the OECD average at 1,068 hours for high school.
  • Ditto for class size; it’s increasing but remains lower that most other nations.
  • Despite the high price tag for a college degree, graduates more than make up for it in future earnings and lower unemployment rates.
    • The unemployment rate for high school drop outs is 15.8%, but for college graduates it drops to 4.9%.
    • College graduates earn about 87% more over their lifetime than high school graduates who don’t go on to college.
Employment by level of education (from OECD report) click to enlarge
Employment by level of education (from OECD report) click to enlarge

College education bought the same benefits in nearly every developed nation.  What’s more, says Schleicher, is that the earnings premium stays put no matter how many more people attend college.

“The one message that is very important messages that emerges from this publication is that the increase in the number of higher educated workers has not led to a decrease in their pay.”

But don’t let that go to your head.

“I think that the competition of the future in the world is based upon what people know and the quality of their human capital,” said the Hoover Institution’s Hanushek, “and we’re sinking relative to all the other developed countries.”

*  The number of Americans earning college degrees has been steadily rising, from 11% of the population in 1970 to 30% in 2010. Younger Americans, however, are not keeping pace with their peers in other developed countries, so among 34 countries in the OECD report, we have fallen to 15th place in the percentage of 25 to 34 year olds with college degrees.