Category Archives: Higher Education

Investing in America’s Workforce: Improving Outcomes for Workers and Employers

Source: Editors: Stuart Andreason, Todd Greene, Heath Prince, Carl E. Van Horn, W.E. Upjohn Institute for Employment Research, 2018

How can well-structured and effective workforce programs and policies result in better economic outcomes for individuals, businesses, and communities?

Explore contemporary research, best practices, and resources from more than 100 authors in the book Investing in America’s Workforce: Improving Outcomes for Workers and Employers.

The book is divided into three volumes: Investing in Workers, Investing in Work, and Investing in Systems for Employment Opportunity. Within each volume are discrete sections made up of chapters that identify specific workforce development programs and policies that provide positive returns to society, to employers, and to job seekers. Download the three volumes and individual chapters below.

Note: The policies and practices presented in the book are intended to spur innovative thinking that results in context-specific solutions. The perspectives are not intended as an endorsement from the Federal Reserve System or its partnering institutions.

VOLUME 1: INVESTING IN WORKERS
Front Matter and Table of Contents
Acknowledgments
Foreword: The Evolving U.S. Labor Market by Patrick T. Harker
Introduction: Investing in America’s Workforce by Stuart Andreason, Todd Greene, Heath Prince, and Carl E. Van Horn

– Building Employer Investment in Workforce Development
– Investing in Undervalued Human Capital
– Investing in Historically Black Colleges and Universities
– Investing in Workers with Different Abilities
– Investing in Workers of the Future

VOLUME 2: INVESTING IN WORK
Front Matter and Table of Contents
Introduction: Investing in Work by Prabal Chakrabarti and Jeffrey Fuhrer

– Investing in Opportunities to Create Good Jobs
– Investing in Work and Wealth
– Investing in Rural Work
– Investing in Human Capital to Support Local Economic Development

VOLUME 3: INVESTING IN SYSTEMS FOR EMPLOYMENT OPPORTUNITY
Front Matter and Table of Contents
Introduction: Investing in Systems for Employment Opportunity by Stuart Andreason and Alexander Ruder

– Financial Innovations in Workforce Development
– Government Investment in Workforce Development
– Investing in Technology
– Investing in Skills and Credentials
– Investing in Regional Workforce Development Systems
– Appendix: Investing in America’s Workforce

Closing the Gap: The Effect of a Targeted, Tuition-Free Promise on College Choices of High-Achieving, Low-Income Students

Source: Susan Dynarski, C.J. Libassi, Katherine Michelmore, Stephanie Owen, National Bureau of Economic Research, NBER Working Paper Series, Working Paper 25349, December 2018

From the abstract:
Low-income students, even those with strong academic credentials, are unlikely to attend a highly selective college. With a field experiment, we test an intervention to increase enrollment of low-income students at the highly selective University of Michigan. We contact students (as well as their parents and principals) with an encouragement to apply and a promise of four years of free tuition and fees upon admission. Materials emphasize that this offer is not contingent on completing aid applications (e.g., the FAFSA or PROFILE). Treated students were more than twice as likely to apply to (67 percent vs. 26 percent) and enroll at (27 percent vs. 12 percent) the University of Michigan. There was no diversion from schools as (or more) selective as UM. The enrollment effect of 15 percentage points (pp) comprises students who would otherwise attend a less selective, four-year college (7 pp), a community college (4 pp), or no college (4 pp). Effects persist through two years of follow-up. The intervention closed by half the income gaps in college choice among Michigan’s high-achieving students. We conclude that an encouragement to apply, paired with a promise of aid, when communicated to students and influential adults, can substantially close income gaps in college choices.

Community colleges with revenue-backed debt – US: 2019 outlook stable with steadying enrollment, higher state and local revenue

Source: Patrick McCabe, Susan I Fitzgerald, Kendra M. Smith, Moody’s, November 29, 2018
(subscription required)

Our stable outlook indicates our expectations for the credit conditions driving the community colleges with revenue-backed debt sector over the next 12-18 months. Total annual revenue will grow 1.5%-2.5%, with relatively steady enrollment allowing for continued modest net tuition revenue growth. State appropriations and local property tax revenue will also support gradual overall revenue growth. However, increasing pension and retiree healthcare liabilities and some voter resistance to debt issuance are a potential hindrance for some community colleges…..

Educational Inequality, Educational Expansion, and Intergenerational Income Persistence in the United States

Source: Deirdre Bloome, Shauna Dyer, Xiang Zhou, American Socialogical Review, Online First, November 14, 2018
(subscription required)

From the abstract:
The children of high-income parents often become high-income adults, while their low-income peers often become low-income adults. Education plays a central role in this intergenerational income persistence. Because education-based inequalities grew in recent decades, many scholars predicted that intergenerational income persistence would increase. However, previous research suggests that it remained stable across recent cohorts. We address this puzzle. Analyzing National Longitudinal Surveys of Youth data, we find that growing educational inequality by parental income, along with rising economic returns to education, increased intergenerational persistence, as scholars expected. However, two countervailing trends offset this increase. The expansion of higher education reduced persistence, because completing college helps low-income children become high-income adults. Yet, this reduction in persistence was far from enough to offset the increase in persistence associated with growing educational inequality and rising educational returns. Intergenerational persistence would have increased if not for another change: within educational groups, parental income became less predictive of adult income. New methodological tools underlie these findings, tools that quantify, for the first time, education’s full force in intergenerational income persistence. These findings suggest that to reduce intergenerational persistence, educational policies should focus less on how many people complete college and more on who completes college.

Genes, Education, and Labor Market Outcomes: Evidence from the Health and Retirement Study

Source: Nicholas W. Papageorge, Kevin Thom, NBER Working Paper No. 25114, September 2018
(subscription required)

From the abstract:
Recent advances have led to the discovery of specific genetic variants that predict educational attainment. We study how these variants, summarized as a linear index — known as a polygenic score — are associated with human capital accumulation and labor market outcomes in the Health and Retirement Study (HRS). We present two main sets of results. First, we find evidence that the genetic factors measured by this score interact strongly with childhood socioeconomic status in determining educational outcomes. In particular, while the polygenic score predicts higher rates of college graduation on average, this relationship is substantially stronger for individuals who grew up in households with higher socioeconomic status relative to those who grew up in poorer households. Second, the polygenic score predicts labor earnings even after adjusting for completed education, with larger returns in more recent decades. These patterns suggest that the genetic traits that promote education might allow workers to better accommodate ongoing skill biased technological change. Consistent with this interpretation, we find a positive association between the polygenic score and non-routine analytic tasks that have benefited from the introduction of new technologies. Nonetheless, the college premium remains the dominant determinant of earnings differences at all levels of the polygenic score. Given the role of childhood SES in predicting college attainment, this raises concerns about wasted potential arising from limited household resources.

Related:
It’s better to be born rich than gifted
Source: Andrew Van Dam, Washington Post, Wonkblog, October 9, 2018

The least-gifted children of high-income parents graduate from college at higher rates than the most-gifted children of low-income parents.

The promise of free college (and its potential pitfalls)

Source: Douglas Harris, Raquel Farmer-Hinton, Debbie Kim, John B. Diamond, Tangela Blakely Reavis, Kelly Krupa Rifelj, Hilary Lustick, and Bradley R. Carl, Brookings Institution, September 2018

From the summary:
….This study examines one of the first randomized control trials of a program similar to many free college and promise scholarship proposals. The Degree Project was launched in Milwaukee Public Schools (MPS) in 2011. Students in 18 randomly selected high schools were promised up to $12,000 to pay for college, at essentially any in-state institution. These funds were sufficient to cover all tuition and fees at the local two-year college—making it a form of free or debt-free college. The funds could also be used to attend four-year colleges, covering more than one year of tuition, and fees. To receive the funds, students had to graduate on time from an MPS high school with at least a 2.5 cumulative GPA and a 90 percent class attendance rate, and fill out the Free Application for Federal Student Aid (FAFSA).

The Degree Project had some impact on students’ motivation, college expectations, and steps toward college, such as applying to more colleges and FAFSA completion. However, it had no effect on the performance measures and no effect on whether students went directly on to college. The most recent evidence does suggest that the scholarship may have slightly increased persistence and graduation in two-year colleges, though not in four-year colleges. We are continuing to track these effects; however, it seems clear at this point that many of the potential benefits, during and just after high school, did not emerge.

Through additional quantitative and qualitative evidence, we identify three related reasons why the effects were not more substantial: (a) the performance requirements greatly reduced the number of students who could plausibly receive the funds; (b) the performance requirements, combined with the temporary, small-scale design, meant that the program did not have the catalyzing effect on high schools that otherwise similar programs have seen; and (c) the context in Milwaukee—particularly, the very low level of academic performance and lack of counselor resources— may have been particularly ill-suited to make a performance-based aid program work well.

In other words, this version of free college did not live up its potential in part because of the way it was designed. While we plan to continue studying the program in future years and more effects may emerge, our first decade of work suggests two key lessons:

1. Avoid performance requirements. Merit or performance requirements, though popular, seem to limit both the effectiveness and equity of financial aid. When students received The Degree Project funds, it increased their attendance and graduation somewhat, but the performance requirements meant that very few actually received any funding. So why have the requirements? The intent is to support and reward students who have the best chance to succeed in college, and therefore the smallest likelihood of dropping out with debt, but the result is essentially the opposite. Under almost any plausible assumptions, performance requirements reduce the number of college graduates more than they reduce the number who drop out with debt. A second possible argument for performance requirements is that they may induce students to work harder and become more academically prepared for college, but we find no evidence of this either. The main effect of performance requirements, then, is to provide more funds to higher-income families, which only reinforces existing disparities.

2. Use free college and other forms of financial aid to catalyze changes in high schools. Policy debates about financial aid tend to focus narrowly on how it makes college cheaper for the individual students who receive the funds. But to fully realize the effects of aid, it has to be leveraged to improve the college-going cultures of high schools. MPS high schools were not set up to make college a viable option for most students. The schools did not make a college prep curriculum or structured supports broadly available, or expect most students to attend college. The Degree Project, with its narrow focus on giving money to individual students, was not designed to address this larger problem and, as a result, it did not have the catalyzing effect on high schools that has been observed in other free college programs. The performance requirements made matters worse; by significantly narrowing the share of students who could benefit from the program, the requirements reduced the potential for positive “spillover effects” across students and educators. In short, for free college to fulfill its potential, policymakers need to leverage it to change high schools…..

Reports: Free College Programs Don’t Benefit Low-Income Students

Source: Ashley A. Smith, Inside Higher Ed, September 6, 2018

Two nonpartisan research groups are urging policy makers to examine the details of tuition-free programs and make them more financially helpful for low-income students.

Related:
The State of Free College: Tennessee Promise and New York’s Excelsior Scholarship
Authors: Alain Poutre and Mamie Voight, Institute for Higher Education Policy, September 2018

From the summary:
As college costs steadily rise, students face unprecedented financial barriers as they pursue higher education. Many federal, state, and institutional policymakers tout free-college programs as solutions to addressing college affordability challenges. But IHEP analysis of two state free-college programs, Tennessee Promise and New York’s Excelsior Scholarship, show that to help low-income students afford college, free-college programs must be designed with equity at their core.

The State of Free College: Tennessee Promise and New York’s Excelsior Scholarship finds that neither Tennessee Promise nor the Excelsior Scholarship allocate scarce state funding to the students with the greatest need. To evaluate if these programs have improved college affordability, IHEP examined the net prices at public colleges in both states before and after the implementation of the free-college programs. The analyses assessed affordability for three student profiles with different financial means and different personal and household characteristics. The research found that both programs do little to remove affordability barriers for low-income students, and instead allocate limited funding to middle- and, in the case of Tennessee, high-income students.

A Promise Fulfilled: A Framework for Equitable Free College Programs
Source: Tiffany Jones and Katie Berger, The Education Trust, September 6, 2018

From the summary:
Each fall, millions of college students across the country start classes in hopes of earning their degree. However, the weight of steep tuition bills, rent, groceries, books, and other costs looming over their heads can often cut that dream short. The latest popular solution to help more students afford a degree, which is supported by policymakers and advocates alike, is “free college.”

But while “free college” sounds good at first, we need to ask, “Does this benefit students from low-income families who need it the most?” Unfortunately, right now the answer is “No. Not unless they are designed around equity.”

Improving Occupational Licensing with Sunrise and Sunset Reviews

Source: Iris Hentz, LegisBrief, Vol . 26, No. 25, July 2018

Occupational licensure is a regulatory method that requires people to secure a license from government in order to practice a certain trade or profession. When implemented effectively, occupational licensure helps protect public health and safety and improves the quality of goods and services.