a community conversation is college worth it? · asu analysis: economic impact of asu graduates in...

Is College Worth It?

A community conversation

Michael M. Crow

January 21, 2015 / Galvin Playhouse, ASU Tempe campus

Massachusetts Constitution 1780

“Wisdom and knowledge, as well as virtue,

diffused generally among the body of the people

being necessary for their preservation of their

rights and liberties; and as these depend on

spreading of opportunities and advantages of

education in various parts of the country, and

among the different orders of the people…”

“…it shall be the duty of the legislators and

magistrates in all future periods of this

commonwealth to cherish the interests of the

literature and the sciences, and all seminaries of

them…”


“…especially at the university at Cambridge…”


CH. 5, SEC. 2

“Maybe it’s time to ask a question that seems almost sacrilegious: is all this investment in

college education really worth it? The answer, I fear, is that it's not. For an increasing

number of kids, the extra time and money spent pursuing a college diploma will leave

them worse off than they were before they set foot on campus.” – Megan McArdle,

Bloomberg View

“If you question the economic value of college, the defenders’ default answer is that it’s

priceless. Before long, spending four years in a lecture hall with a hangover will be

revealed as an antiquated debt-fueled luxury good.” – Peter Thiel, PayPal

“Knowledge is a form of capital that is always unevenly distributed, and people who have

more knowledge, or greater access to knowledge, enjoy advantages over people who

have less.” – Louis Menand, Harvard University

Varied Perspectives

The American Dream

Educational attainment is key to

social mobility.

Employment Polarization

Non-routine Cognitive Non-routine Manual Routine

1975 - 2010

The Trend is the Cycle: Job Polarization and Jobless Recoveries, 2012

Value to the Individual

The internal rate of return for a

degree substantially exceeds the

cost of attending college.

Economists put the rate of return of

a degree in 2012 at 15%, far

above the return on stocks and

bonds.

Return to Bachelor’s Degree, by Major 2012

College Graduates

Overall Underemployed College Graduates

Total, all majors 15% 12%

Engineering 21% 17%

Math and computers 18% 14%

Health 18% 13%

Business 17% 14%

Communications 15% 13%

Technologies 15% 12%

Social sciences 15% 12%

Sciences 14% 12%

Architecture 14% 8%

Liberal arts 12% 9%

Agriculture and natural resources 11% 9%

Leisure and hospitality 11% 9%

Education 9% 7%

U.S. Census Bureau, American Community Survey; U.S. Department of Labor, O*NET; U.S. Department of Education, Digest of Education Statistics 2012; The College Board, Trends in College Pricing

2013 and Trends in Student Aid 2013

This is true even for so-called

“underemployed” college graduates.

Age

57 53 49 45 41 37 33 29 25 61

$160,000

$140,000

$120,000

$100,000

$80,000

$60,000

$40,000

$20,000

0

$180,000 E

arn

ing

s

Professional degree

Doctoral degree

Master’s degree

Bachelor’s degree

Associate degree

Some college

High school

Mean Earnings by Age, 2009

2009 American Community Survey (ARC) Integrated Public Use Micro Sample

People who “learn to learn”

continue to earn over their lifetime

and earn more. Those who do not

see their wages remain flat as

they age.

As time passes and more learning

is needed, the earnings gap

widens for younger generations.

$31,384 $32,299

$30,525

$27,883 $28,000

$33,655

$36,498

$34,595

$32,173

$30,000

$38,833

$41,989

$44,770 $43,663

$45,500

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

Silents (1965) Early Bloomers (1979) Late Bloomers (1986) Gen Xers (1995) Millenials (2013)

Rising Earnings Disparity Between Young Adults With and Without a College Degree

Median annual earnings among full-time workers ages 25 to 32, in 2012 dollars.

High School Graduate Two-year Degree/Some College Bachelor's Degree or More

Pew Research Center tabulations of the 2013, 1995, 1986, 1979, and 1965 March Current Population Survey (CPS) Integrated Public Use Micro Samples

Value to Society

10%

5%

0%

-5%

-10%

-15%

-20%

15%

0%

9.1%

-9%

-14.1%

Ma

r-2

01

3

Dec-

2007

Dec-2

012

Ma

r-2

00

8

Sept-

20

12

Jun-2

012

Ma

r-2

01

2

Dec-2

011

Jun-2

008

Sept-

20

08

Dec-2

008

Ma

r-2

00

9

Jun-2

009

Sept-

20

09

Dec-2

009

Sept-

20

11

Jun-2

011

Ma

r-2

01

1

Dec-2

011

Sept-

20

10

Jun-2

010

Mar-

2010

Some graduates/no B.A. High school graduates

(no college)

College graduates Less than high school

Percent Change in Employment Since Start of Recession,

Sorted by Educational Attainment

Bureau of Labor Statistics, via Haver Analytics

The discrepancy between graduates from college and high school has grown far worse in recent years.

2010 2008 2006 2004 2002 2000 1998 1996 1994 1992

14%

12%

10%

8%

6%

4%

2%

0%

16%

2014

Year

Un

em

plo

ym

en

t R

ate

Less than a High School Diploma

Bachelor’s Degree or Higher

High School Diploma

Some College, No Degree

Associate Degree

Unemployment Rates Among Individuals Ages 25 and Older

Education Pays 2013: The Benefits of Higher Education for Individuals and Society, College Board

Recovery from the Great Recession

has not occurred for workers

without a college degree.

Employment has fallen for high

school graduates while it has grown

for degree holders.

ASU Analysis: Economic impact of ASU graduates in Arizona

Approx. 207,000 ASU

graduates worked in AZ in

2012.

Their aggregate earnings was

an estimated $11.4 billion.


They directly contribute an

estimated $819 million in state

taxes.


A two percentage point increase in the

share of university graduates in the

workplace would equal an estimated $1.2

billion gain in income and an additional

$87 million in state tax payments.



If ASU contributed to a 6 percentage point increase –

from 23.7% to 29.7% – of 25-to-34 year olds with a

bachelor’s degree who are absorbed into the AZ labor

market, the projected result would (in the steady state):


Raise AZ GSP by 3.5%

Generate a $623 million increase

in State taxes and fees combined


Increase combined State & Local

taxes by $777 million


Increase combined State & Local

taxes and fees by $1.12 billion

respectively


College graduates are more

likely to…

Have access to and participate

in employer-provided pension

plans

Have access to employer-

provided healthcare


likely to…

Lead a physically active

lifestyle


likely to…

Participate in both vigorous and

moderate exercise


likely to…

Spend more time per day with

their children


likely to…

Participate in volunteer

activities


likely to…

Demonstrate a greater

understanding of political

issues and are more likely to

vote


likely to…

College graduates are less

likely to…

Smoke

Suffer from obesity


likely to…


likely to…

Have children who suffer from

obesity


likely to…

Live in households below the

poverty threshold


likely to…

Participate in public

assistance programs

Educational Attainment and

Public Assistance

Pe

rcen

tage P

art

icip

atin

g

0%

10%

20%

30%

40%

50% 43%

24%

19% 17%

9%

22%

11% 9% 7%

2%

24%

12% 10%

7%

2%

Medicaid School Lunches SNAP

Less than a

High School Diploma High School Diploma Some college,

No degree Associate Degree Bachelor’s degree

or higher

Percentage of individuals 25 and older living in households participating in selected public

assistance programs by education level

Education Pays 2013: The Benefits of Higher Education for Individuals and Society, College Board

The Challenge

Progress to Date

Current Trajectories without Innovation

What about Arizona?

"Our economy … is growing, but it’s time to up our game. Our people have put their faith in Arizona’s future. They bring their families here, start businesses here, seek jobs here and build new lives here – believing in the promise of this state. Yet, as opportunity goes, in the rankings of states, Arizona is still too far down the list. We have what it takes to be at the top.” − Arizona Governor Doug Ducey

January 5, 2015

0

10

20

30

40

50

60

70

MA

SD

NJ

MN

ND

CT IA NE

NH

WI

PA

VA

NY

KS RI

MA

OH

MS

MO IN NC

AR

DE

US HI

CO

CA IL

TN

AL

MI

WV

GA

KY

NM

ME

WY

OK

SC

UT

VT

MT

TX

LA

FL ID

WA

AZ

OR

AK

DC

NV

Percentage of All Youths Enrolling in Postsecondary Education

Arizona is falling further behind.

60%

70%

80%

90%

100%

110%

120%

1997 1999 2001 2003 2005 2007 2009 2011 2013

Per Capita GDP Relative to US Average

Arizona

Colorado

Nevada

New Mexico

Oregon

Utah

Washington

-20%

-10%

0%

10%

20%

30%

40%

50%

4% 8% 12% 16% 20% 24% 28% 32%

Pe

rce

nt

Inc

rea

se

in

Pe

r

Ca

pit

a G

DP, 2

00

0-1

0

Change in Percent of 25 Year or Older Having Attained a Bachelors Degree or Higher, 2000-10

Relationship between Change in Educational Attainment and Economic Development in US States, 2000-2010

Data Sources: US Census Bureau,

North Dakota

Arizona

Utah

South Dakota

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

1000 1200 1400 1600 1800

Pe

r C

ap

ita

GD

P

Sum of PISA Math, Reading and Science Scores

Education and Economic Growth in OECD Countries

Data Sources: OECD, PISA 2012;

Singapore

Arizona

United States

A New Economy

Requires a New Kind of

University

ASU Charter

ASU is a comprehensive public research university, measured not by whom it excludes, but by whom it includes and how they succeed; advancing research and discovery of public value; and assuming fundamental responsibility for the economic, social, cultural, and overall health of the communities it serves.

Demonstrate leadership in

academic excellence and

accessibility

ASU Goals

ASU Goals

Enhance our local impact and

social embeddedness

ASU Goals

Establish ASU as a global center

for interdisciplinary research,

discovery and development by

2020

ASU Goals

Enhance our local impact and

social embeddedness

Critical Thinking and Problem

Solving

Master Learner

Critical

Thinking

General

Education Breadth of

knowledge

Courses in

Major Deep subject

area expertise

Electives

72.8

64.4 64.7 64.3 64.1

58

60

62

64

66

68

70

72

74

ASU Gallup Study National GPI Public Universities Large, Public Universities(>10,000)

Private Universities

ASU Gallup Study % Employed Full-Time

Is there value in earning a college degree to

the individual?

Is there value in earning a college degree to

the economy and to society?

If Arizona is going to progress, do we need

to produce more master-learners?

YES.

YES.

YES.

Why do people still ask if college is

worth it?

a community conversation is college worth it? · asu analysis: economic impact of asu graduates in...

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