Phone Paing, Saahil Jaswal, and Jared Jeziorowski
Education matters. Quality education is an investment that empowers individuals and improves the welfare of society at large. It equips people with knowledge and ways to apply it to the world around them. There is no universal structure of education, but most countries share a similar structure that consists of some different stages. Formal education in the United States is an academic system of schooling which follows a structured progression: Elementary School, Middle school, Secondary School (also known as High School), and then Postsecondary Education. Elementary School is the first traditional stage of formal education, and in the U.S., it consists of five years of education (Grades 1 to 5). Then follows Middle School and Secondary School, which ends after the student finishes High School (Grade 12). “Tertiary Education” , “Higher Education” and “College” are all synonymous with Postsecondary Education. Postsecondary Education is the focus of this book and these terms will sometimes be used interchangeably. This final stage of formal education includes public and private universities, colleges, and other technical training institutes and vocational schools. Although almost everyone starts their education with elementary education, not everyone is equally equipped to progress through the postsecondary stages. Many variables can influence who attends college, who receives the most returns to education, and who successfully finishes college.
Global Trends in Educational Attainment
One might think rising college attendance is a uniquely Western phenomenon because many Western countries have achieved universal literacy since 1965 (UNESCO 2017). However, this rising trend in educational attainment is also true for the rest of the world. Over the years, there was a global proliferation of government-sponsored public education systems – the number of schools grew, and so did the number of children attending them. The world is more educated than ever before as the average years of schooling has increased from 0.49 years in 1870 to about 8.5 years in 2010. In developed countries, the 2010 average years of schooling is 11.94 years but developing countries have lower average years of schooling at 7.72 years (Lee and Lee, 2016). This suggests that the majority of people in the developing world had some form of elementary and some secondary education. For developed countries, an average 11.94 years of schooling suggests that almost everyone has completed their secondary education and some are pursuing postsecondary education (college/tertiary education). In summary, great progress was made towards the goal of a universal education. Globally, 36% of individuals aged 20-24 had no elementary education in 1970, but by 2015, this had fallen to 14% and if the trend continues, it is expected to fall to 1% by 2100. The share of the global population aged 20-24 with secondary education has grown from 36% in 1970 to 58% in 2015. However, only modest additional increases in the rates of secondary education are expected, rising to 64% by 2100 (Lutz et al, 2014). Nonetheless, the global average share of the population aged 20-24 with postsecondary education is expected to grow significantly from 6% in 1970 to 32% in 2100. This rapid rise in demand is due to increased competition for higher-earning jobs and employers’ use of higher education degrees as a signal of higher ability. In addition, parents invest in the education of their offspring so that they would have better future earnings, and countries also invest in order to raise the productivity of the workforce (Rees, 2018).
The global gender gap in educational attainment has also been declining across the last decades in most countries, but women have still not caught up with men globally. According to the United Nations, about one-third of countries in the developing regions have not achieved gender parity in primary education. Overall, however, between 1995 and 2018, the percentage of countries with gender parity in education rose from 56% to 65% in elementary education, from 45% to 51% in lower secondary, and from 13% to 24% in upper secondary education. Globally, equal numbers of girls and boys were enrolled in primary and secondary education in 2018, whereas in 1995 around 90 girls were enrolled for every 100 boys (Crespo Cuaresma et al. 2014). Significant progress in South Asia, and India in particular, drove this growth.
Global Trends in Education Quality
Although enrollments and educational attainments are on the rise globally, using average years of schooling assumes that the quantity of education is a useful indicator to compare educational attainment across countries. It also assumes that all skills and human capital come from formal schooling and ignores the informal education that is shaped by the broader environment where the child grows up. For example, there are factors outside of school such as family, peers and community networks that have a direct and powerful influence on children (Hanushek, 2002; Woessmann, 2003). Therefore, the quantity of education does not correlate to the quality of education, and using the average years of schooling could introduce serious bias in the model estimations. Developed countries simply enjoy a better quality of education. Even though the global average years of schooling are on the rise, “the average student in Ghana or Peru does not gain the same amount of knowledge in any year of schooling as the average student in Finland or Korea” (Hanushek & Woessmann, pg 173). Fortunately, international agencies such as the International Association for the Evaluation of Educational Achievement (IEA) and the Organization for Economic Cooperation and Development (OECD) have conducted many international tests, such as TIMSS and PISA, since the 1960s. These tests were designed to evaluate student performance in cognitive skills such as mathematics and science. The PISA test, for example, measures 15-year old student’s reading, mathematics and science literacy every 3 years (OECD.org). While a student from the Philippines would go through the same stages of elementary and secondary education, fifteen-year-old students in the Philippines scored lower in reading, mathematics and science than those in most of the countries that participated in PISA 2018. This implies that students in the Philippines have a lower quality of education and using measures such as PISA, is a more precise method to estimate the importance of a quality education in economic development.
One reason why global education attainment has increased is because economic growth is strongly affected by the knowledge capital of workers (Altbach et al, 2009). This is crucial in both developed and developing countries; focusing only on the quantity of school years and ensuring that everybody is in school regardless of the quality of learning, is not the best policy. Knowledge, rather than just the time spent in school is what counts for economic growth. Fortunately, most of the trends in the quality of education are also positive. There were economic gains to improving the access to quality access at all levels of education. First, the lower middle income countries on average would see gains in the average level of GDP over the next 80 years of 13% (OECD.org), but even high income OECD countries would on average, gain 3% percent in GDP from bringing all students up to basic skills (PISA Level 1). Secondly, there was a positive economic impact when ensuring access of all children through lower secondary. While this has essentially no impact on high income OECD countries where access is almost already complete, it has a noticeable impact for the lower income countries. Finally, there were gains in test scores when countries simultaneously improved education access and quality. Lower middle income countries gain on average 28% higher GDP, and upper middle income countries gain 16% in the level of future GDP. This is also relevant to upper income countries, since they also have a considerable number of students who do not get to basic skill levels in some subjects. For example, in the U.S., 23% of 15-year-olds do not get to Level 1 in PISA’s mathematics assessment. Getting them to Level 1 could lead to a future GDP that is 3.3% higher on average (NCES, 2012).
U.S. Trends in Educational Attainment
The United States is the focus of this book, but since the country has high rates of quality elementary and secondary education attainment, most of the topics in this book will be about Postsecondary Education attainment. The United States enjoys exceptionally high participation in Postsecondary Education (Marginson, 2016) and as of 2021, there were 19.78 million students who enrolled in college. The National Center for Education Statistics (NCES) forecasts that by 2025, this number will increase to 20.12 million students. The percentage of Americans aged 25 to 34 with a postsecondary degree increased by 10 percentage points between 2010 and 2020, reaching 52 percent, compared with the OECD average of 45 percent. Attainment rates varied widely across the United States in 2020, from 33 percent for those living in Nevada to 61 percent for those living in Massachusetts and 77 percent for those living in the District of Columbia. U.S. spending on postsecondary education is also relatively high compared with the OECD average. Developing countries gain the most in student achievement when investments are made in basic material inputs such as textbooks, libraries and teacher training, but as an industrialized country, the U.S. already has the minimum level of these basic resources (Buchmann, 2001). The U.S. spent $34,036 per postsecondary student in 2018, the second-highest amount after Luxembourg and nearly double the OECD average ($17,065). Also, U.S. spending on postsecondary education as a percentage of GDP (2.5 percent) was substantially higher than the OECD average (1.4 percent). These total expenditures include amounts received from governments, students, and all other sources.
Geography is also a factor easily overlooked when accessing participation rates in higher education. Most postsecondary institutions are not evenly distributed throughout the nation and as a result, rural populations are more distant to such institutions than urban populations. In Mexico where the national gross enrollment ratio has grown to 26.2 percent in 2005, attainment in poor urban areas lagged behind at 11 percent, and in poor rural areas at 3 percent. Similarly, since indigenous peoples are more likely to live in remote areas, aboriginal people in Australia have less access to secondary schools compared to the rest of Australia as of 2006 (Altbach, 2009). Only 1 in 3 aboriginal people born in 1998 has completed secondary education. Wealthier countries generally perform better in negating the geography factor. The United States, for example, has a vast community college system which geographically reaches most of the American population. Still, some studies suggest that greater distances from home to school correlates to higher levels of dropping out, absences, and early pregnancies. More detailed analysis on geographic location and its impact on student success will be discussed in Chapter 4: Determinants of Student Success.
The United States also experiences a gap between male and female students because in 2020, 25 to 34 year-old women were more likely than 25 to 34-year-old men to attain a postsecondary education: 57 percent of women had a postsecondary qualification, compared with 47 percent of men, a difference of 10 percentage points. In 2021, women make up 57.1% of students who enrolled in college in 2021 and this trend is also expected to rise. Across OECD countries, the postsecondary education gap between 25 to 34 year-old men and women was wider (13 percentage points) than the gap in the United States (10 percentage points). In 2020, the postsecondary attainment rate of 25 to 34 year-old men in the United States was 8 percentage points higher than the OECD average, whereas the rate of 25 to 34 year-old women in the United States was 5 percentage points higher than the OECD average. Nevertheless, gender is not the only significant variable that determines who goes to college. There are other factors (race, ethnicity, test scores, parents’ highest educational attainment, etc) that could affect who gets a college education, and the significance of these determinants will be further explored in Chapter 2: Who attends College.
Trends in Student Success
There has been a significant general trend of increasing college attendance over the past few decades. However, it is important to analyze how these students are performing as well. Trends in student success vary across different demographics and for this reason, exploring the trends in post-secondary education student success of multiple groups will allow for a better overall understanding of what determines college student success and how it has changed over the years. The groups of individuals that will be discussed include immigrant students, students with learning disabilities, and students taking online courses. In order to discuss trends in college success, it is important to define what success in college is. In most cases, degree attainment is the predominant indicator of college success, since graduation is the ultimate goal for all college students. However, it is also important to use GPA as an indicator of success, since GPA is an important factor when applying to graduate or professional school, as well as being used in hiring practices of recent college graduates. Although degree attainment is the primary goal of enrolling in college, there is a strong argument that students who graduate with a high GPA (3.0 and higher) were academically more successful than students who graduate with a GPA under 2.5 (Kinsman & Showers 2017).
Higher education has been forced to undergo major changes as technological advancements, automation, and the COVID-19 pandemic have complicated college learning (Liu 2021). One way the pandemic has affected higher education is through the influx of international students in the United States. Travel restrictions imposed during the pandemic made it very difficult for international students to attend college in America. Additionally, policies enacted by Trump’s administration were largely viewed as unwelcoming and a deterrent to attracting new international students (Liu 2021). Most would consider this a problem for the future of the United States’ education and workforce considering international students contributed $39 billion to the U.S. economy in 2018 and helped create 455,622 jobs (NAFSA, 2018). Additionally, international students tend to enroll in fields that are both difficult and high in job demand. In the 2018/2019 school year, the top four fields for international students in the U.S. were Engineering (21.1%), Math and Computer Science (18.6%), Business and Management (16.6%), and Social Sciences (7.7%). Despite generally enrolling in difficult majors, and having to face significantly more obstacles in order to succeed, international students have consistently been positive contributors to American education and the workforce. (Ballerini & Feldbaum 2021). For example, the past two government administrations have had differing sanctions on the ability of foreigners to enter the country in order to acquire a degree. Furthermore, obtaining a driver’s license and work authorization is also more difficult for immigrants to obtain than for their peers. Not only is it more difficult for immigrants to gain access to American education, but it is also much more expensive for them to do so. This is largely due to a lack of access to federal or state financial aid. Considering what it takes for immigrants to get the opportunity to study in America, it is no surprise that they do not take the opportunity for granted and consistently succeed. (Ballerini & Feldbaum).
Research has found that college students with learning disabilities have exhibited a high dropout rate along with a low degree completion rate. In 2012 it was reported that 24.7% of students with disabilities did not return to college after their first year, and 50.6% dropped out by year 3 (Kinsman & Showers 2017). Observing the success trends of college students with learning disabilities highlights the need for special needs education improvement at all levels of education. It was found that only 27% of high school students with a learning disability had all the credits required for high school completion, compared to 50% of peers without learning disabilities (Shifrer, Callahan, and Muller 2013). If college success trends in students with learning disabilities are going to improve, change must be made at lower levels of education as well. Furthermore, in order to improve the success of students with learning disabilities at the postsecondary level will require consideration and an understanding of important variables that affect college success (Kinsman & Showers 2017). The two most important factors to take into consideration include family background and student attributes. When researching students with learning disabilities it was found that household environment has a strong significant direct effect on the students’ attributes, which in turn has a direct effect on college success (Kinsman & Showers 2017).
Trends On Returns to Education
Education provides avenues for people to increase their quality of life. This is achieved through increased income, better lifestyle choices, and developing effective habits. It is extremely important to consider the returns to education on an individual level as well as a broader and more collective outlook. Educational attainment must also be considered as different levels of education (primary, secondary, tertiary) are met with higher or lower returns to education. The United States during the 20th century and early 21st century experienced a massive expansion in education. One of the reasons for this expansion is due to the change in the schooling model. Rather than just elementary and high school, now the advent of Jr. High separates those previous schools. This strategy which followed schoolhouses with few rooms proved greatly effective for student success. Another reason for the expansion in education is due to the collective thought of the people calling for free public education. This idea became extremely popular in the early 20th century. As a result of this expansion “the share of men with a postsecondary degree rose rapidly and linearly from 12.9 percent in the first cohort (who turned 30 before 1951) to 30.9 percent in the fourth cohort (who turned 30 between 1976 and 1987)” (Pfeffer and Hertel 2015). While the number of degree holders has gone up it is entirely feasible that educational outcomes are far from equal. Why has the number of degree holders gone up significantly since the turn of the 20th century? One reason is the job market in more recent times seems to almost demand a bachelors degree in order to gain employment. Another reason could be that in the last few decades it has become more common for middle aged people to go back to school and earn a degree. This was not as common in the early 20th century as it is now. This is most likely the result of having more access to public education. The first noticeable trend regarding returns to education is that those who continue into higher education (secondary and tertiary) generally earn more than their counterparts. On top of that those with higher education are more likely to be hired on a full time basis. The reason for this is due to the increase in human capital and acquired knowledge that is gained from attaining higher education. It seems to be, as you receive more education you earn more than those who are below you educational attainment level, “In 2012, the average terminal four-year college graduate over age 25 earned 63% more than the average terminal high school graduate, who in turn earned 38% more than the average high school dropout, and more education is strongly related to the probability of having a full-time job” (Papay, Murnane, and Willett 2014). While there are numerous benefits to education, one important measure to consider when determining the returns on education is the cost of attendance. As mentioned earlier attaining a higher degree either through secondary education or tertiary education most likely will lead to higher earnings as compared to someone with only primary education. The cost of attending a public 4 year college in 2005 was $5,351, by 2020 that price has jumped to $9,349 that is a 74.7% increase (Education Data). This leads to the question of how many years of education can an individual receive and be able to pay for before one would see diminishing returns on their investment in education. Taking into account initial education and its square it can be seen that “the relationship is inverted-Ushaped, with a peak at 7.5 years of education” (Kreuger and Lindahl 2001). This means that after 7.5 years of schooling it would be likely to start to see diminishing returns on the investment. Another observable trend in regards to returns on education is that those who are able to secure a degree from a private university yields a higher income as compared to a student at a public university. Although a higher education puts you in a beter position to increase your earnings, the types of schools also affect the increase in earnings, but how much of an effect can the school you choose effect earnings? The answer may be more substantial then one would initially expect, especially when considering the elite universities. When comparing we can see that, “the mean annual salary of public college graduates is $85,257 per year and the mean annual salary of private college graduates is $93,445. This is a difference of around $8,188 yearly or around a 9.5 percent increase in average annual wage for the graduates of private institutions over the wages of public college graduates” (Parthemer 2020). While earnings for both may be high compared to the national average these numbers show an underlying lack of social mobility when we consider who can afford to attend private or elite universities. While these few thousand dollars difference may not seem that significant in the short run, in the long run those few thousand dollars could have lasting impacts. Another thing to consider is the effect initial higher earnings plays when leaving your current job for another one. As your next job more than likely will not pay you less than what you were previously making. So how do incomes of elite university students compare to those in not elite schools, “The average income of students attending the elite university are 87% higher than those of students attending less selective universities in Milan. Comparing this to the 52% income premium estimated with the regression discontinuity implies that about 40% of the unconditional mean premium is due to selection” (Anelli 2016). A reason for the higher income of the elite university student could be a result of the reputation of the university. Having a degree from one of these elite schools could signal to potential employers that his human capital is higher than other with a comparable degree from a non elite school.
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