The dumbing of America

For the first time in decades, and probably ever, workers retiring from the US labor force will be better-educated on average (according to one measure anyway) than their much younger counterparts. Some 12 per cent of 60-64 year olds have a master's degree or better; less than 10 per cent of 30-34 year olds do. More generally, the decades-long rise in the educational quality of the labor force is coming to an end. This is important, because that rise has been one of the principal forces driving American economic growth.

These findings are from a new study by Jacob Funk Kirkegaard of the Peterson Institute for International Economics: "The Accelerating Decline in America's High-Skilled Workforce: Implications for Immigration Policy". If you are interested in the prospects for American competitiveness and continued economic leadership, Jacob's study is mandatory reading.

Consider this particularly striking chart (from chapter 1 of the study [pdf], page 12), which shows the proportion of the labor force with at least a college degree, by age group, for OECD countries.

Look first at the squares in the diagram, which represent 55-64 year olds. For this age group, the US lags only Russia (whose competitiveness, Jacob points out, was not a problem thanks to communism). But the US is exceptional in the diagram (Germany is the only other instance) in that its younger cohorts, on this measure, are no better educated. In most other countries, the proportion of 25-34 year olds with at least a college degree has soared. (More than half of South Koreans, Japanese and Canadians in this age group have a college degree or better.) As a result, in that cohort, the US is not 2nd, but 11th. At first sight, anyway, it is hard to see how US leadership in per capita incomes can be sustained in the face of this trend.

Jacob cites this and other data as urgent grounds for liberalizing immigration of highly educated workers (a cause to which I would be very sympathetic, I admit, even if it were not for the good of the country, since I am one such immigrant). The point is, the US devotes a lot of effort to keeping such workers out, while other countries try just as hard to attract them. I'll come back shortly in another post to what I think of Jacob's specific recommendations, but for the moment I just wanted to draw your attention to the study--and to that disconcerting chart.

Comments

It may be true that many retiring professionals today have master's degrees, but how many of those retirees had their degree by age 30? I'm not sure, but I'm willing to bet that many got their degrees mid-career. So the current batch of workers may be equally well educated by the time they retire.

The other thing that makes the US exceptional, and skews the graph, is the amount of immigration in the last two decades, which is running close to historic highs in percent terms, and is at an all time high in total numbers (nearly 1 million immigrants per year). Unique to the US is the number if unskilled migrants, mostly illegal. That probably explains the anomoly. Nor would I worry about it too much.

Oh, and I completly support liberalizing immigration policies for highly skilled workers.

Posted by Daniel | March 28, 2008 10:17 PM

As Daniel pointed out, a key item that would have to be established is the number of people pursuing higher degrees later in life. I don't have any statistics at my fingertips, but anecdotal evidence suggests that it has become far more common over the past 25 years for people to go back to school for Master's degrees or professional degrees like LLM's when they are in their 30s, 40s, or even 50s. (I did a night JD program and most of the people there were probably over 35.)

Posted by Just Dropping By | March 29, 2008 12:23 PM

This is further evidence of the last dying gasp of the Baby Boomer generation to hold onto power. Younger people have now shown not only are they interested in the issues, but they are also smart and shrewd enough to get their agenda passed over older voter's and candidates wishes. Since the older generation has essentially already lost this debate and it's finally been revealed that they simply are NOT that much smarter, if at all, than the younger generation they don't know what to do. A few of the actually intelligent ones are welcoming this new involvement by younger people with open arms and actually listening to them. A large number of them are, however, unfortunately, retreating to their de facto position of ignoring reality, claiming they're always right and insisting they are going to win despite overwhelming evidence to the contrary.

Posted by John | March 29, 2008 4:34 PM

One word solution (already noted by your commenters) to how the US maintains its leadership in per capita incomes: Immigration. Which, admittedly, only moves the question to whether we will have the wit to allow those who are a) interested in coming, and b) educated to actually come and keep our economy florishing. On current evidence, definitely wouldn't bet the ranch on it.

P.S. It occurs to me to wonder if the large number of individuals in the 55-65 cohort with college educations might not be related in part to the fact that enrollment in college could help one avoid the draft during the Vietnam War. No more draft leading to a national reversion to the mean in this area. Just wondering....

Posted by wj | March 29, 2008 6:41 PM

There is a point everyone seems to be missing, but is crucial to the argument. What about the non-degreed innovators/entrepeneurs? I believe that American Innovation is the key to our economic superiority. A metric that judges us here is probably far more important. Patents, in my experience, are far from the whole story. Business innovation may be even more important -- think Jobs vs Wosniak. Remember Bill Gates dropped out of MIT (presumably they were too slow and not teaching him enough).

I believe that the BA, BS, MA, MS, PhD crowd serves as effective labor for the true drivers, the entrepreneurs and visonaries (who inevitably can't run a big or moderate sized business and need to be pushed out). Figure out how to measure them and you have a story, not to mention an investment strategy.

Another issue is that not everyone benefits from college. There are some who do not imporve there marketable skills sufficiently to merit paying for college. I imagine that ratio may be near the top countries level of education, which would provide a sensible reason for why the age brakcets bunch up for the US and Germany. It is further possible that educational innovation can improve the skill benefit to raise the natural stagnency level. This could explain the differnce between us and Germany (e.g. Microskils), and could become crucial to future competitiveness (e.g. some kind of Sci Fi mind expansion).
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Comments on the comments:

John seems to claim something that might be synergistic with my point, but the mystery fight between old and young is too ephemeral for me to figure (as a leading edge Gen Xer I imagine being in the middle of the argument, ignored by both sides). He strikes me as simultaneously complaining about(the original version as it matures) and reinventing (the new version he is living) the Baby boomer angst a la Roger Daltry's "Won't Be Fooled Again."

To add to Just Dropping By's point, I would say that those who enter the work force, figure themselves out, and then get an advanced degree may be more effective than those who continue through to a PhD directly out of high school.

I too favor liberalizing immigration for skilled workers (I don't fear competition). I also think that a ngelected benefit of current immigration policy is that the unskilled workers we get here illegally are naturally screened for initiative and determination (think about the problem from their shoes), which seem like good qualities to add to the labor pool. Keeping enforcement high and granting amnesty every few years may actually be good policy (though counter-intuitive).

Posted by Keith | March 29, 2008 7:35 PM

Thinking of my own kids' educational attainments, they are getting degrees, but liberal arts degrees. When they were in high school and early college, I stressed that math, science, and tech subjects were important. They refuted my claims, saying that all the research and engineering jobs had lower salaries! Yes, and why? Because in these fields, foreigners with H1B visas were doing all this kind of work in the US, and getting paid poorly by US industries for it. Young folks aren't stupid; they're plainly seeing that working hard in technical subjects simply doesn't pay-off for a career any longer. So why not take-up painting and poetry instead?

Posted by valupak | March 30, 2008 2:32 AM

Right, the study is clearly flawed because lots of people with advanced degrees get them after 30, especially if they are public schoolteachers, who make up a big fraction of advanced degree-holders. My mother-in-law, for example, got her Masters in special education in her 40s.

A much more disturbing study was done last year by Nobel Laureate economist James Heckman. He found that the high school dropout rate had bottomed out around 1970 and had risen since then. The biggest cause was the changing demographic makeup of the U.S. population, especially the growth of the Hispanic share. Among Hispanics born in America or who had lived here since at least age 8, the dropout rate was twice the white rate.

For an overview and analysis of Heckman's study, see:

http://www.vdare.com/sailer/080101_dropout.htm

Posted by Steve Sailer | March 30, 2008 2:49 AM

Clive,

You've got it backwards. The U.S. doesn't devote enough effort to keeping unskilled workers out. Nobel Laureate James Heckman writes:

These recent Hispanic immigrants are primarily low-skilled Mexican workers … The migration of workers with low levels of education has increased substantially over the past 40 years.… In fact, we find no evidence of convergence in minority-majority graduation rates over the past 35 years."

Heckman's study carefully inspects seven massive "longitudinal" surveys that have tracked thousands of young people through their adult lives. It finds that graduation rates for blacks and Latinos improved during the 1960s, when legally segregated schooling was effectively abolished. But since then, there has been stagnation and, perhaps, slight deterioration for all three major ethnic groups.

This intractability of racial differences is something that is constantly assumed away by popular pundits who demonize anyone who suggests that these gaps might have genetic origins. "All we have to do is change the environment!"

Perhaps. But, despite 35 years of rapid changes in the social environment, nothing has happened to the dropout disparities. The only difference is that there are now far more low-performing minorities than in 1972.

With racial gaps, this is a common pattern seen across many different measures. Relative quality differences among the races languish virtually unchanged from decade to decade. But, primarily through immigration policy, we allow relative quantity to change relentlessly—in inevitably unfavorable directions.

Posted by Steve Sailer | March 30, 2008 2:55 AM

Steve Sailer writes "This intractability of racial differences [in high school graduation rates over time] is something that is constantly assumed away by popular pundits who demonize anyone who suggests that these gaps might have genetic origins."

If the genetic origins have to do with the intellect, you are barking up the wrong tree. High school graduation is usually about perseverence, showing up, thinking that school is important and having parents who think the same. If instead you think it's any sort of intellectual winnowing, I suggest you spend a day hanging out at the nearest community college.

Posted by Hal | March 30, 2008 1:46 PM

I interview people often looking to hire numerate college grads and people with master's level educations.I have been in the workforce 30 years and interviewing (hiring) people about 20 years.

This generation is dumber than dirt. If it wasn't for foreigners, we would have no IT and very little of a finance workforce. Granted, the foreign workers english is bad, but in some cases the communications skills are better that US-educated airheads.

Also consider that a Masters or PhD earned 20-40 years ago might have been more challenging and of higher quality.

Posted by Jozef | March 30, 2008 2:37 PM

I work in Aerospace and have been involved in hiring folks for 10 years now. My experience is that there are plenty of smart people in the workforce and I wonder what fields Jozef has experience in?

I have read plenty about calls for trouble in the US because of lagging participation in Math & Science. AIAA, the primary Aerospace professional organization, has held roundtable discussions because of the concern. I keep reading that it is because of the pay difference. Apparently, all smart people are becoming doctors and lawyers.

I have trouble buying this. Starting engineers can get ~60k/year which is not chump change by any measure. Further, smart people with strong sceince and math skills will not be happy with a traditional doctor or lawyer job, at least not the people I work with. Biotech would work though. Engineers like to create things, and scientists like to discover things. Both groups are frustrated by lawyers and regulations, which are much less elegant than natural laws.

If there is a profound demographic switch away from Engineering, I would suggest the (increasing?) rigor of the course loads may be a factor (5 yrs for a BS is common with serious students). Perhaps we are graduating less, but they are better prepared on average?

As for immigration, as previously stated, I am all for it. But, it is overstated as a threat to technical salaries. An important skill in any job is communication. The development of good communications can often lag in the best engineers (consider the joke "I R En-gan-eer"). Immigrants who have to add the ESL disadvantage do not bring unfair competition. I hired a brilliant Russian who has corrected my writing his English is so good. I also passed on a brilliant Russian who is stuck designing tail light covers for Toyota at a third of what his brilliance could command, because of his poor English and people skills.

I just don't see a Malthusian calamity here, or opn second thought maybe I do, if you consider the outcome of Malthus' predictions.

Posted by Keith | March 30, 2008 5:13 PM

The US Department of Education National Assessment of Education Progress (NAEP) indicates a majority of American Hispanics lack functional literacy and numeracy.

NAEP 2005 Mathematics Scores
50% of Hispanic eight graders score below basic in mathematics.
http://nationsreportcard.gov/reading_math_2005/s0021.asp?tab_id=tab2&subtab_id=Tab_6&printver=#chart

NAEP 2005 Mathematics Scores
56% of Hispanic fourth graders score below basic in reading.
http://nationsreportcard.gov/reading_math_2005/s0006.asp?tab_id=tab1&subtab_id=Tab_6&printver=#chart

While many US Hispanics are non-English speakers one might well ask how well do Mexicans, the country of origin of a super majority of American Hispanics, do on academic tests in their own country? International PISA 2006 academic tests results indicate the average Mexican does very poorly. PISA officials estimate over 50% of Mexican 15-year old youth are functionally illiterate and thus unable to compete in the modern economy the country is attempting to establish. Lastly 51% of Mexican 15 year olds tested scored below a critical level of science literacy.

http://www.worldfund.org/index.php

The long term economic prospects of the United States do not look good.

Posted by Randy | March 30, 2008 7:51 PM

Those claiming a shortage of skilled workers should ask themselves a simple question: Why have engineering salaries lagged inflation for the past seven years? If this is a shortage, I'd hate to see a surplus. The problem is a lack of demand for skilled workers, not a lack of supply.

Chinese tourist: I am very impressed by the standard of living in America. But I don't see any factories. What do you make? How do you pay for all this luxury?

American host: We sell houses to each other.

Jozef said, "This generation is dumber than dirt. If it wasn't for foreigners, we would have no IT and very little of a finance workforce."

Really? In the defense industry, due to citizenship and security requirements, American citizens predominate. Yet we enjoy total world dominance in defense technology. When those Indian geniuses we're always hearing about can come up with better weapons or at least a way to keep the hundreds of millions of starving masses off the sidewalks of Calcutta, then maybe we'll have something to learn from them.

Posted by Artemus | March 31, 2008 9:13 AM

In some countries, students hang out at universities for years because the job markets are tight. If they get student grants and can't find jobs, why wouldn't they stay on for graduate school? This does not necessarily make their degrees more useful to their countries. Americans don't do this because we can't afford the tuition, and also because finding a job after graduation is relatively easy.

I agree with some of the remarks about too many uneducated immigrants, though. Maybe now that people have to make harder choices about how much house to buy, there will be less of a market for maids and gardeners and the flow be reduced. There's something distinctly un-American about having servants -- I don't want us to be the kind of low-wage country where everybody has household help -- and this trend has bothered me for some time.

Mexicans who learn English and get nursing degrees are welcome to come, however.

Posted by M.C. | March 31, 2008 10:13 AM

Keith:
Uh, Bill Gates dropped out of Harvard, not MIT.

Posted by Joe Klein's conscience | April 1, 2008 11:19 AM

The other thing that makes the US exceptional, and skews the graph, is the amount of immigration in the last two decades, which is running close to historic highs in percent terms, and is at an all time high in total numbers (nearly 1 million immigrants per year).

Although in absolute numbers US immigration is quite robust with respect to history, it is no where near "close to historic highs in percent terms" if you're talking about the rate of immigration. A century ago America's net rate of immigration averaged something like 1.5% annually. Today's rate - probably less than .5% annually even including illegals -- is barely a third of what it was in the early 1900s (to say nothing of periods of even higher immigration, like the 1840s and 1850s). It is true that the foreign born percentage of the US population is quite high by historical standards. But this largely results from the fact that native born Americans -- like other westerners -- increasingly eschew having babies. To put it another way, given a sufficiently intense dearth of childbirths, even a fairly tepid inflow of immigrants will pretty quickly result in a rather sizable share of the population that was born elsewhere.

Posted by Jasper | April 1, 2008 12:56 PM

Just look at the current high school drop out rate. Where are we going to find the assembly line jobs for all these folks? And with the housing slump, who will get hired as construction 'labor?' LA Unified graduates less than 45% of its freshman class and it's not located in Mississippi or a third world country. Even running the register at McDonalds requires some 'smarts' even though the register buttons are mostly pictures. We could soon see multi-generational consequences as the children of the under educated enter the system and further bring down overall achievement.

Posted by Mike Evans | April 1, 2008 6:35 PM

Steve Sailer writes "This intractability of racial differences [in high school graduation rates over time] is something that is constantly assumed away by popular pundits who demonize anyone who suggests that these gaps might have genetic origins."

Hal "If the genetic origins have to do with the intellect, you are barking up the wrong tree. High school graduation is usually about perseverence, showing up, thinking that school is important and having parents who think the same. If instead you think it's any sort of intellectual winnowing, I suggest you spend a day hanging out at the nearest community college."

My guess is that the Bell Curve crowd needed a new measure, because people were looking at black-white IQ differences, and figuring that things which could change on a 30-year time frame might not be genetic.

For those who don't know, Steve Sailer is a racist Bell Curve believer who posts great big hairy posts on why [insert name of ethnic group here] is genetically dumb.

Posted by Barry | April 2, 2008 12:31 PM

Congratulations! This post was selected as one of the five best business blog posts of the week in my Three Star Leadership Midweek Review of the Business Blogs.

http://blog.threestarleadership.com/2008/04/02/4208-a-midweek-look-at-the-business-blogs.aspx

Posted by Wally Bock | April 2, 2008 5:48 PM

Heck, I recently completed my PhD in history from a top five program. I have a visiting job at one of elite liberal arts colleges in the country. I have published in the top journal in my field. I have read Plato in the original ancient Greek. I have read Cicero in the original Latin. I have read Walter Benjamin in the original German. I have read Chekhov in the original Russian.

But I have to say, it all feels like a goddamn waste of time. I am pushing forty. I haven't had the time or money to have kids. My salary is $50,000--hardly chump change, but not so much considering my age and the weeks and long nights spent working. The majority of my students--privileged and poorly educated--will likely earn more almost at once, if they avoid the academic route. Soon, I may be out of job, because my entire field has been turned upside down by 9/11. Am I one of the smart ones in your count or one of the stupid ones? Anyone hiring?

Posted by Cornfields | April 2, 2008 6:04 PM

That 55-64 cohort would've turned 18 between 1962-1971: perfect drafting age for Vietnam. That chart shows the effect of the Vietnam War and the military draft with its completely unfair system of college deferments.

Posted by Aatos | April 2, 2008 6:08 PM

Whether it is caused by genetics or not, we have no idea how to fix achievement gaps between blacks/hispanics and whites/asians. Let's stop low-skilled immigration until we figure out how to eliminate these achievement gaps. That is the prudent thing to do.

Posted by scottynx | April 2, 2008 7:21 PM

"
This is important, because that rise has been one of the principal forces driving American economic growth.
"

Do we have real evidence for this?

One claim for what is going on is that the bulk of the population contribute to increases in productivity because they're all so smart and sensible. An alternative claim is that it's only ever a few percentage of the population that actually do this --- the upper levels (but not all) scientists and engineers, likewise the upper levels of the business classes; so while education for everyone else may be nice in terms of making their lives richer etc, it has nothing to do with productivity.

If this second model is true, then the main thing that matters is that "the best people" get fully educated, that their are no artificial barriers preventing them from getting their advanced degrees. The issue of how many other people also get degrees is basically irrelevant.

I have no evidence on which of these two models better describes reality, but I certainly don't regard it as immediately obvious that it is the first.

Posted by Maynard Handley | April 3, 2008 1:49 PM

We're currently, in effect, betting the country that dumbing down the median through easy illegal immigration won't matter much because the elite will pull us through.

It would sure be nice if somebody had some evidence on this, one way or another, now wouldn't it? Of course, we'd have to be allowed to talk freely about population quality issues without fear of getting kicked to the curb like, oh, say, the #2 individual on the Atlantic Monthly's 2006 list of Most Influential Living Americans, James Watson.

By the way, the subprime crisis suggests that driving down the median household's human capital and income isn't cost free, even in the short run.

Posted by Steve Sailer | April 5, 2008 6:14 AM