CFED
Stay Informed!
The Inclusive Economy
The Critical Nature of Human Capital
By Steve Crawford, Senior Fellow on 08/03/2011 @ 11:00 AM
Of the three component of the competitiveness triangle – innovation, entrepreneurship and human capital – the most important is human capital – the knowledge, skills and capabilities of the workforce. Indeed, it is a vital ingredient of the other two. Since this will be my last blog post in this series (I have taken a new position as a Research Professor at the George Washington University Institute of Public Policy), I want to make several points about the growing gap between the demand for and supply of workers with post-secondary education and skills, the opportunities this gaps offers for upward mobility but also the obstacles (affordability and more) the poor face in trying to seize such opportunities, and the role of public policy in facilitating post-secondary access and success. These thoughts draw in part on my experience as a college professor and administrator, elected school board member, special advisor to a state higher education commission, and executive director of a state workforce investment board.
Most simply put, the key issues are quality, equality, quantity, and productivity. Quality refers to the depth and significance of the knowledge and skills acquired. For years we have lamented the mediocre performance of American K-12 students on international tests, but comforted ourselves with the belief that our higher education system is the world’s best. Yet, a growing body of evidence suggests otherwise.
The latest contribution to this critique is the book, Academically Adrift, by Richard Arum and Josipa Roksa. Based on a study of 2,322 students in 24 four-year institutions, it finds no statistically significant gains during the first two years of college in the critical thinking, complex reasoning, and writing skills of at least 45 percent of the sample, as measured by the Collegiate Learning Assessment. The authors argue that these troubling findings are the result of a student body distracted by socializing or employment and an institutional culture that places a low priority on undergraduate learning. Yet, by quality I also mean the economic relevance of the applied learning that does take place. On this, see the recent publication by the National Governors Association: Degrees for What Jobs? Raising Expectations for Universities and Colleges in a Global Economy.
Equality refers to the enormous variations in educational attainment by socioeconomic status, especially race and class. The high school graduation rates (not counting GED) of African-American and Hispanic ninth graders hover around 60 percent, vs. 81 percent for whites and 90 percent for Asians. Differences by income group are even greater: 82 percent of young people from the highest income quartile in America have attained a bachelor’s degree by age 24, compared to only 8 percent of those from the lowest income quartile.
We like to think that education is the door to opportunity for poor children to achieve upward mobility, but in fact it may simply serve to reproduce or even amplify existing inequalities. Although the degree-attainment rates of minorities and low-income students have improved, the gaps that separate Latino and African-American students from their white peers actually are wider today than in 1975, and the gap between low-income and high-income students has doubled.
Quantity has become an issue for two reasons. First, the U.S. has fallen from first among countries in the proportion of young adults who attain a post-secondary credential to 10th, thus perhaps weakening our competitiveness in the global economy. Second, most new jobs require at least some post-secondary education, and even at this time of high unemployment, many good jobs are going begging because employers cannot find workers with the needed skills. This is partly a function of the distribution of specialties among those with post-secondary credentials but not entirely by any means.
President Obama and other national leaders have called for dramatically increasing the proportion of youth obtaining a post-secondary credential, but this vision will be very difficult to realize because of issues of readiness and affordability. The insufficient numbers of young adults who are college-ready reflects the quality and equality problems discussed earlier. Yet, it also reflects the “wilt” among low-income and minority teenagers in their determination to pursue higher education.
Fortunately, several studies and pilots show that matched educational savings accounts not only help young students save money for college; they also “make hope concrete” and motivate students to buck their peer cultures and study hard in high school. On this, see especially the publications of the Center for Social Development at Washington University in St. Louis and the work of CFED, especially its Partnership for College Completion, a partnership with the United Negro College Fund, KIPP schools, and Citibank.
Affordability, on the other hand speaks to productivity. The traditional way to make higher education more affordable has been to expand the financing for it, usually through public financing of institutions and student loans and grants. The problem is that costs have continued to rise far faster than the general inflation rate. Moreover, the states and the federal government face daunting fiscal constraints, student educational debts are generating a backlash, and the public is beginning to question higher education’s value proposition. According to a recent Pew Research Center poll: “A majority of Americans (57%) say the higher education system in the United States fails to provide students with good value for the money they and their families spend.” All this is creating a growing pressure to increase the productivity of higher education.
There are many ways to increase productivity – from three-year degrees to more online education – but most are controversial. The most interesting work in this area comes from Harvard Business School professor, Clayton Christensen and his colleagues. They have produced two important books, Disrupting Class (2008) and The Innovative University (2011) and a report co-published with the Center for American Progress, Disrupting College (2011). All these do a superb job of applying Christensen’s theory of “disruptive innovation”, first presented in his classic, The Innovator’s Dilemma (1997), to education.
I cannot close without saying a word about K-12 education. It’s a good thing that the country is debating ways to increase teacher effectiveness, from improving teacher education to linking salaries to student performance. But we are neglecting two other promising paths forward: public school choice and work-based learning. There is not room here even to summarize key points, but on the former, see Richard Kahlenberg’s excellent book, All Together Now: Creating Middle Class Schools through Public School Choice, which shows how to counter the terrible effects of concentrated poverty –in part by combining choice with the requirement that every school take its fair share of free-and-reduced-meal students. On the latter, see the recent report from the Harvard Graduate School of Education, Pathways to Prosperity: Meeting the Challenge of Preparing young Americans for the 21st Century, a report on work-based learning programs that hold great promise for improving high school graduation rates, especially of low-income males.
EDITORS’S NOTE: Good luck in your new position at George Washington, Steve!
Copyright © 2012 CFED – Corporation for Enterprise Development 
1200 G Street, NW Suite 400 Washington, DC 20005 202.408.9788
Powered by ARCOS | Design by Plus Three
Comments
Leave a Comment