Tennessee Graduate Schools: Building the Workforce for the Future

Tennessee Conference of Graduate Schools

2/8/2017

Why Tennessee Needs to Support Graduate Education

• Given: Individuals in Tennessee with a graduate education earn more than those with a bachelor’s alone or no college degree.

• Given: Tennessee’s demand for workers with graduate, doctoral and professional degrees is projected to grow by 18% by 2022.

• Tennessee graduate degree production is insufficient to meet labor force demands.

• Tennessee lags in total higher education R&D expenditures, which drives graduate education.

• Modest increases in graduate education will return billions in increased earnings and tax revenue to Tennessee.

2

Unemployment Rate by Educational Attainment in the US Ages 25 and Over,

2015

1.7%1.5%

2.4%2.8%

3.8%

5.0%5.4%

8.0%

0 .0 %

1 .0 %

2 .0 %

3 .0 %

4 .0 %

5 .0 %

6 .0 %

7 .0 %

8 .0 %

9 .0 %

Do cto ral de gre e P rofe ssio na ld eg ree

M aste r's de gr ee Bac he lo r'sd eg ree

Asso cia te'sd eg ree

So m e co lle ge ,n o d eg ree

High s ch oo ld ip lom a

Le ss th an a hig hsc ho ol d ip lom a

Source: US Bureau of Labor Statistics, Current Population Survey 3

Average Personal Income by Educational Attainment in the US

Ages 25 and Over, 2015Floor crosses Y-axis at U.S.'s average personal income: $43,000

Source: US Bureau of Labor Statistics, Current Population Survey

$15,000

$25,000

$35,000

$45,000

$55,000

$65,000

$75,000

$85,000

$95,000

Doctoral deg re e Pro fe ssio nalde gree

Ma ste r'sde gree

Ba chelor'sde gree

Associate'sde gree

So me colle ge,no d egree

High sc hoo ldiploma

Less tha n a h ig hscho ol d ip lo ma

$81,150 $86,500

$67,050

$56,850

$39,900 $36,900

$33,900

$24,650

Aver

age P

erso

nal In

com

e

4

$15,000

$25,000

$35,000

$45,000

$55,000

$65,000

$75,000

Do cto rald eg ree

P rofe ssio na ld eg ree

M aste r'sd eg ree

Bac he lo r'sd eg ree

Asso cia te'sd eg ree

So m eco lle ge , n o

d eg ree

High s ch oo ld ip lom a

Le ss th an ah ig h sc ho o l

d ip lom a

$69,360 $73,933

$57,309

$48,591

$34,103 $31,539

$28,975

$21,069

Aver

age

Pers

onal

Inco

me

Average Personal Income by Educational Attainment in TN Ages 25

and Over, 2015

Floor crosses Y-axis at Tennessee's average personal income: $36,753

Source: US Bureau of Labor Statistics, Current Population Survey 5

Graduate Degree Production by State, 2015

1.06

1.27 1.311.40 1.41

1.74

2.06

0.0

0.5

1.0

1.5

2.0

2.5

Arkansas Miss iss ippi Tennessee Kentucky Georgia Nor th Carolina Alabama

Total Per 1,000 Population

Sources Graduate Council State Snap Shots, 2016 6

Tennessee Graduate Degree Production Compared to California and US Average, 2016

Sources Graduate Council State Snap Shots, 2016

Total Degree's Conferred50,823

11,531 8,654

-

10,000

20,000

30,000

40,000

50,000

Calif or nia U.S. Aver age Tennessee7

Projected Job Growth between 2012 & 2022 by Typical Entry-level Education

Source: Council of Graduate Schools, Master’s degree requirements & the U.S. workforce, 2016

10.8%

16.0%

18.4%

12.1%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

All Doctoral or Profess ionaldegr ee

Mast er 's degree Bachelor's degree

8

Projected Job Growth between 2012 & 2022 by Typical Entry-level Education • Jobs that require a master’s degree at entry-level

are projected to be the fastest growing segment of the workforce between 2012 and 2022.

• Jobs that require a master’s degree at entry-level, but do not require previous work experience are projected to grow even faster by 20.3%.

• These jobs include, but are not limited to: counselors, social workers, therapists, nurses, and social scientists, and represent an additional 369,400 jobs by 2022.

Source: Council of Graduate Schools, Master’s degree requirements & the U.S. workforce, 2016 9

Current Number of Tennessee Graduate Degrees and the Number needed per year

to meet Projected Demand by 2022

Source: Council of Graduate Schools, Master’s degree requirements & the U.S. workforce, 2016

5,900

6,986

5,200

5,400

5,600

5,800

6,000

6,200

6,400

6,600

6,800

7,000

7,200

Mast er 's

Current Project ed Needed

872916

1,012 1,063

0

200

400

600

800

1,000

1,200

Profess ional Doctoral

Current Project ed Needed

10

Current Number of Tennessee Graduate Degrees and the Number needed to

meet Projected Demand by 2022

• Tennessee needs to increase the number of Master’s degrees by 1,086 per year.

• Tennessee needs to increase the number of Doctoral or Professional degrees by 147 per year.

• Tennessee’s total demand is projected to increase by 18%.

Source: Council of Graduate Schools, Master’s degree requirements & the U.S. workforce, 2016 11

Higher Education R&D Expenditures, by State: FYs 2006 – 2015

Alabama

Arkansas

Georgia

KentuckyMississippi

North Carolina

Tennessee

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Stat

e R&

D Ex

pend

iture

s (Do

llars

in th

ousa

nds)

Source: Higher Education Research and Development Survey Fiscal Year 2015, NCES 12

Higher Education R&D Expenditures, by State and Source of Funds

(in $1,000), FY 2015

StateAll R&D

expenditures

Source of funds

Federal government

State and local

governmentInstitution

funds BusinessNonprofit

organizationsAll other sources

United States 68,667,801 37,876,879 3,812,408 16,711,730 4,000,614 4,236,993 2,029,177

Alabama 902,922 529,899 47,849 227,015 60,729 24,229 13,201

Arkansas 293,494 98,709 64,221 90,629 12,521 2,252 25,162

Georgia 2,046,068 1,210,757 53,130 570,182 107,007 81,742 23,250

Kentucky 532,991 227,125 58,830 177,031 16,054 22,964 30,987

Mississippi 408,232 194,209 92,269 90,166 22,370 7,682 1,536

North Carolina 2,815,343 1,600,445 147,577 540,057 337,324 152,002 37,938

Tennessee 1,075,972 626,143 31,129 315,223 52,200 38,807 12,470

Source: Higher Education Research and Development Survey Fiscal Year 2015, NCES 13

Higher Education R&D Expenditures, by

State FY 2015, 2006 – 2015

$293,494 $408,232 $532,991

$902,922 $1,075,972

$2,046,068

$2,815,343

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

Arkansas Miss iss ippi Kentucky Alabama Tennessee Georgia Nor th Carolina

5% 5%

19%

39%48%

52%

62%

0%

10%

20%

30%

40%

50%

60%

70%

Kentucky Miss iss ippi Arkansas Tennessee Alabama Georgia Nor th Carolina

Percent Change

Source: Higher Education Research and Development Survey Fiscal Year 2015, NCES 14

Higher Education R&D Expenditures, by State FY 2015, 2006 – 2015

• States like Arkansas and Alabama are rapidly increasing their expenditures on R&D.

• Tennessee needs to increase its expenditures on Higher Education R&D to remain competitive.

• Graduate students are the backbone of R&D projects in Tennessee Universities.

15

Total Graduate Degrees Awarded

by Tennessee Public Universities

0

500

1,000

1,500

2,000

2,500

Austin Peay Sta

te U

niversi

ty

East Tenne

ssee St

ate U

niversi

t y

Mid

dle Tennesse

e Sta

te U

nivers

ity

Tennesse

e State

Univ

ersit y

Tennesse

e Techno

logica

l Univ

ersit

y

Universi

ty o

f Mem

phis

Universi

ty o

f Ten

nessee, C

hattanooga

Universi

ty o

f Ten

nessee, K

noxville

Universi

ty o

f Ten

nessee, M

artin

Universi

ty o

f Ten

nessee, M

edical…

Source: Tennessee Department of Higher Education, 2014-2015 Tennessee Higher Education Fact Book, Table 2.416

Percent of Public Graduate Degree Awards by Discipline in Tennessee, 2014

0% 5% 10% 15% 20% 25% 30%T rad es & In du stria l

P hilos op h y, Re lig ion , & T he o lo gyFo re ig n L an gu ag es & Lite ratu re

Arch itec ture & Re la te d P rog ram sOth er

Lib rary Scie nc eC om mu n ic atio ns

M ath em at ic sLib era l Arts & S cien ce s

Agricu ltu reC om pu te r & In for ma tio n S cien ce s

Visua l & P er form ing ArtsEn g lish Lan g ua ge & L ite ra ture

P hy sica l Sc ie n cesBio lo gica l & Life S cien ce sSo cia l S cien ce s & Histo ry

P syc ho log yP ark s, Re cre atio n, Le is ure & F itne ss

La w & Le gal Stu d ie sP rote ctiv e Se rvice s & Pu b lic Affairs

En g in e erin gBus in e ss Ma n ag em en t

Ed u ca tio nHea lth P ro fess io n s

Source: Tennessee Department of Higher Education, 2014-2015 Tennessee Higher Education Fact Book, Table 2.517

Higher Education Research and Development

Higher Education Research and Development

• Why spend resources on Higher Education R&D?– R&D expenditures provide an indication of the state’s

overall investment climate and capacity to create and disseminate knowledge.*

-Higher Ed. Institutions are critical in this role.– R&D expenditures support:

• Intellectual property development and licensing;• New technologies;• Formation of new businesses;• A higher standard of living in the long run.

*Center for Innovative Technology. See www.cit.org. 19

The Economic Impact of Higher Education

R&D Expenditures in Tennessee, 2015

• Total: $1.1 billion.

• Sources: Majority from Federal Funds (58.2%).

• Nearly 30.0% comes from the Institutions while the remainder comes from a variety of sources.

• State and Local Government funding accounts for just 2.9%.

20

Source of Tennessee Higher Education R&D Expenditures in 2015

58%

3%

29%

5% 4%1%

Federal gov ernment

State and l oc al government

Instituti on funds

Business

Nonprofit organi zations

All other sources

21Source: Higher Education Research and Development Survey Fiscal Year 2015, NCES

The Economic Impact of Higher Education

R&D Expenditures in Tennessee, 2015– Higher Education R&D expenditures also provide

a measurable economic impact in the Short Run.• Effects estimated using the IMPLAN©* economic

impact methodology for Tennessee.

– Economic Impact Basic Premise: One person’s spending becomes another’s income.

*See www.implan.comfor more information.

22

The Economic Impact of Higher

Education R&D Expenditures in

Tennessee, 2015• In 2015, $1.1 billion in Higher Education R&D

expenditures in Tennessee supported:

– Nearly 13,000 jobs;

– Labor Income of almost $900 million;

– Tennessee produced Value Added of $1.2 billion;

– Output (the total value of goods and services produced) of just over $2.2 billion.

– Also helped generate an estimated $52.9 million in State and Local Tax revenues.

23

Top Ten Industries Benefited by Higher Education R&D Expenditures

in Tennessee, 2015

Description EmploymentScientific research and development services 5,591.5Food services and drinking places 716.1Employment services 567.9Services to buildings and dwellings 515.6Real estate establishments 338.1Private hospitals 235.4Offices of physicians, dentists, and other health practitioners 227.4Management, scientific, and technical consulting services 196.7Civic, social, professional, and similar organizations 180.3Wholesale trade businesses 177.2

24

Source: SBBER estimate generated via the IMPLAN methodology.

The Impact of Graduate Education on Lifetime Earnings

Worklife Expectancy in Years by Educational Attainment

at Age 25

Education Level Men Women AverageHigh School 33.41 27.98 30.70

Some College 33.88 30.71 32.30

A.A. Degree 35.14 33.28 34.21

BA Degree 36.42 32.96 34.69

MA Degree 38.42 34.58 36.50

PROF/PHD Degree 40.09 37.12 38.61

Source: Gary R. Skoog, James E. Ciecka and Kurt V. Krueger, The Markov Process Model of Labor Force Activity: Extended Tables of Central Tendency, Shape, Percentile Points, and Bootstrap Standard Errors, Journal of Forensic Economics 22(2), 2011, pp.165-229. 26

Worklife Expectancy in Years by Educational Attainment,

Average of Both Genders at Age 25

30.70 32.3034.21 34.69 36.50

38.61

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

High School Some College A.A. Degree BA Degree MA Degree PROF/PH DDegree

Note: Values are the average of men and women combined. Original data is presented by gender.Source: Gary R. Skoog, James E. Ciecka and Kurt V. Krueger, The Markov Process Model of Labor Force Activity: Extended Tables of Central Tendency, Shape, Percentile Points, and Bootstrap Standard Errors, Journal of Forensic Economics 22(2), 2011, pp.165-229. 27

Lifetime Earnings by Educational Attainment

$3,244,179

$4,171,565

$5,668,881

$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000

PROF/PHD Degree

MA Degree

Bachelor’s

Sources: U.S. Bureau of Labor Statistics, Current Population Survey, and Gary R. Skoog, James E. Ciecka and Kurt V. Krueger, The Markov Process Model of Labor Force Activity: Extended Tables of Central Tendency, Shape, Percentile Points, and Bootstrap Standard Errors, Journal of Forensic Economics 22(2), 2011, pp.165-229. 28

Lifetime State and Local Taxes by Educational Attainment

$178,430

$229,436

$311,788

$0 $50,000 $100, 000 $150, 000 $200, 000 $250, 000 $300, 000 $350, 000

PROF/PHD Degree

MA Degree

Bachelor’s

Sources: U.S. Bureau of Labor Statistics, Current Population Survey, and Gary R. Skoog, James E. Ciecka and Kurt V. Krueger, The Markov Process Model of Labor Force Activity: Extended Tables of Central Tendency, Shape, Percentile Points, and Bootstrap Standard Errors, Journal of Forensic Economics 22(2), 2011, pp.165-229. 29

Economic Impact of Adding 1,000 MAs and 1,000 PROF/PHDs on Tennessee

Over a Work Life

Employment Labor Income Value Added Output

1,000 MAs 6,855.8 $327,144,749 $567,482,705 $921,655,283

1,000 PROF/PHDs 17,924.9 $855,337,890 $1,483,714,659 $2,409,718,291

Total 24,780.7 $1,182,482,639 $2,051,197,364 $3,331,373,574 Impacts are attributable to the difference in earnings between MA over Bachelor's and PROF/PHD over Bachelor's. Impacts were calculated using the IMPLAN methodology. Results are specific to Tennessee. For more information see implan.com.

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Benefits of More MAs, Professionals, and Ph.D.s

• Increased Worklife– MA degree results in nearly 2 years more over a Bachelor’s.– PROF/PHD results in almost 4 years more than a Bachelor’s.

• Increased Earnings– Over a worklife, an MA degree results in $927,386 more than a Bachelor’s degree.– Similarly, a professional/Ph.D. degree results in $2.4 million more than a

Bachelor’s degree.• Increased Tax Payments to State and Local Governments

– Vs. a Bachelor’s degree, 1,000 more MA graduates in TN would result in $3.5 billion more tax revenue to TN over their expected worklives, or a net present value of $1.6 billion.

– Vs. a Bachelor’s degree, 1,000 more PROF/PHD graduates would result in $5.0 billion more tax in tax revenue over their expected worklives, or a net present value of $2.7 billion.

31

Why Support Graduate Educationin Tennessee?

• More Graduate Education leads to:– Greater productivity;– Lower unemployment;– Higher incomes and a higher standard of living;– Additional tax revenue for Tennessee.

• A better workforce plus more R & D expenditures will result in more employers and increased opportunities for all Tennessee residents.

32