Letters from 2021
On the changing economy and higher education system
By Anthony P. Carnevale
March 2021 marked one year since the COVID-19 outbreak was declared a pandemic. As the public health situation improved last spring, the US economy and education system faced a new set of challenges. The newsletters that I wrote in 2021 emphasized the value of higher education in today’s economy, the growing gap between college haves and have-nots, and the need for a new approach to youth policy — all of which I expect will remain key themes of CEW’s research in 2022.
Reflecting on one year of the pandemic
March 3, 2021
One year ago, a novel coronavirus began wreaking havoc as it sickened people worldwide and caused schools and businesses to shutter, kicking the economy into a major recession. Unemployment peaked at 14 percent in April, and cumulative job losses reached 23 million. Workers in occupations that rely on face-to-face contact, including food preparation and serving and personal care and service, have seen especially high unemployment rates across education levels. Likewise, those in the leisure and hospitality industry continue to face relatively high unemployment.
The recession has been a major setback for women after decades of progress in the workforce. Women were more likely to work in jobs that were hit hard by the downturn, and, in the spring, they were four times more likely than men to report that they had stopped working so they could care for children. The recession has also exacerbated racial inequality in the labor market, as Black/African American and Hispanic/Latino workers, especially those with less education, have faced disproportionate shares of job losses.
While our research has revealed who is bearing the brunt of the economic devastation, it has also highlighted the advantages that educated workers have in the economy. Workers with postsecondary education have been more likely to telework, and they have been more insulated from the effects of the downturn, as they were during the Great Recession. By January, the unemployment rate was 9 percent for those without education beyond high school, compared to 4 percent for those with at least a bachelor’s degree.
College enrollment used to increase during recessions, but higher education is no longer the refuge that it once was during periods of high unemployment. Unexpected financial and health challenges have altered the back-to-school calculation for many potential students. In the fall, three-quarters of households with students planning to pursue postsecondary education revised their plans in some way. For students, delaying postsecondary education could have long-lasting effects on their chances of graduating and entering the middle class. For some colleges and universities, sudden declines in enrollment have led to drastic measures, including layoffs and closures.
The status of schools and businesses across the country has been in limbo for months, and the economic recovery has stalled. The unemployment rate has hovered above 6 percent since October, and about 8.5 million jobs were lost from January 2020 to January 2021.
There are many reasons to be optimistic that the public health crisis will subside this year, bringing much-needed relief to the economy and education system. However, for workers without postsecondary education — and the higher education institutions poised to serve them — COVID-19 is just the first punch. The changing economy is leaving behind workers without postsecondary education, a shift hastened by automation. While selective colleges will weather stagnating enrollment, less selective institutions face long-term enrollment declines and financial difficulties that threaten their ability to serve the students who need them most.
Learn more: COVID-19’s Impact on Education and the Economy.
College grads, be ready to fire your employer
May 6, 2021
College students across the country are preparing to graduate and start their careers. Just as many of this year’s graduates will have a more normal graduation ceremony than last year’s graduates, this year’s graduates also enjoy better job prospects than last year’s. The class of 2020 graduated into a major recession that will scar their lifetime earnings potential. However, we forecast a bright economic future for the class of 2021, even though it won’t appear very promising at first.
The unemployment rate for recent college graduates typically surges in the summer as new graduates flood the labor market, vying for jobs. The economy usually absorbs new graduates by the fall, but we expect to see an extremely strong increase in the unemployment rate of recent college graduates this summer. The economy will have to absorb roughly 2 million new bachelor’s degree graduates, along with bachelor’s degree recipients from the class of 2020 who are still looking for jobs. With a higher number of college graduates seeking entry-level jobs, we anticipate that the summer surge could extend into the fall. If so, unemployment will continue among recent grads despite signs of a strong recovery.
Recent college graduates may have particular difficulty finding jobs in industries hit hard by the pandemic recession. At the bachelor’s degree level, workers in the leisure and hospitality, information, natural resources, transportation and utilities, and other services industries still face relatively high unemployment rates. Last year’s graduates who are still seeking employment may face even more challenges now that they are considered long-term unemployed.
The economic recovery is on the horizon, and despite the extended summer surge, there will soon be more opportunities for the classes of 2020 and 2021. My advice for new graduates? It no longer pays to be loyal to your employer. Young college graduates have increased their earnings by firing their employer and taking a new job with higher pay. In today’s economy, it pays to be more loyal to your skills and experience than to your employer.
The future of American higher education
August 5, 2021
What happens next? The COVID-19 pandemic was a shock to the country’s postsecondary education and training system. My sense is that it marks only the beginning of significant demographic, economic, and policy changes.
Much of what I have to say about the future of postsecondary education and its role in the economy starts with two sets of facts.
The first is that, since the 1980s, postsecondary education and training has become the most well-traveled pathway to economic and social success. The short version of the story goes like this: in the 1970s, no more than a high school diploma was required for two-thirds of jobs. Nowadays, more than two-thirds of jobs require at least some postsecondary education or training.
The second fact is more troubling. Because of its new prominence in American economic life, higher education has also become the capstone in an education system that contributes to the reproduction of race and class privilege across generations. The glass is either 70 percent empty or 30 percent full, depending on how you look at it. Our research shows that a child from a low-income family who has top test scores in kindergarten has just a 31 percent chance of graduating from a four-year college and getting a good job by age 25, while a child with low test scores who comes from a family in the top income quartile has a 71 percent chance of doing so.
The available evidence suggests that these two trends — the growing value of postsecondary education and its role in replicating race and class privilege — will continue and likely strengthen in the coming years. In addition, the economic recovery, changing demographics, technological advancement, and major policy proposals are all at play in the future of higher education in America.
Continue reading: The Future of American Higher Education.
How US youth policy has failed
November 18, 2021
For today’s young people, the journey to adult economic independence is longer and more complex than in the past. Between World War II and the 1980s, young people, primarily young men, could get good jobs directly after high school and reach financial independence in their mid-20s. These days, it takes many young people until their 30s to get the postsecondary education and high-quality work experience they now need to latch on to a good job and launch a career. But many youth, especially the least advantaged, don’t attain good jobs at all.
Our failure to help all youth make the trip from early childhood education to adult economic independence is plain. Our research shows that, on average, the most talented disadvantaged youth have less chance of success on this journey than the least talented advantaged youth. Kindergartners who have low test scores and are from families in the top quartile by family socioeconomic status (SES) have a 71 percent chance of being in the top half by SES in their late 20s. However, kindergartners who have high test scores and are from families in the bottom SES quartile have only a 31 percent chance of being in the top half by SES in their late 20s.
The nation has long had a disjointed approach to youth policy. The pre-K–12 system, postsecondary education, and the workforce operate in silos that rarely communicate or cooperate with one another. As a result, many young people fall through the cracks. In addition, insufficient federal investment has hampered youth policy from meeting the evolving needs of young people.
It’s time for the United States to adopt an all-one-system approach to youth policy. This type of approach would connect each segment of the transition from early childhood to early career, with data-informed guidance and wraparound support services along the way. It would provide students with opportunities for career exploration from kindergarten through college. It would break down the artificial barriers between secondary schools, postsecondary institutions, and labor markets. A more robust career counseling system would give students the information and guidance they need to plan and pursue their educational and career goals.
Learn more: If Not Now, When? The Urgent Need for an All-One-System Approach to Youth Policy.
Dr. Carnevale is the director and a research professor at the Georgetown University Center on Education and the Workforce. CEW is an independent, nonprofit research and policy institute affiliated with the Georgetown University McCourt School of Public Policy that studies the links among education, career qualifications, and workforce demands.
Thanks to Gayle Cinquegrani and Emma Wenzinger for editorial feedback and Johnna Guillerman and Fan Zhang for graphic design.
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