HIGHER EDUCATION AND INTERNATIONAL COMPETITIVENESS

1. David B. Bills University of Iowa April 2011 HIGHER EDUCATION AND INTERNATIONAL COMPETITIVENESS

2. 3 Big Questions • How does U.S. higher education compare with other nations? Where are behind and where we are ahead? • What needs to be done to further strengthen the U.S. competitiveness of this industry in the next decade? • What research should CASIC conduct to help bring this about?

3. Some subquestions • What can we make of the fact that the expansion of secondary and postsecondary education, economic productivity, and post-industrialism have risen together (each to an astonishing degree) over the past several decades? • Are these trends causally related to each other?

4. Two Big Facts • Huge Expansion of Educational Enrollments around the Globe: The World Educational Revolution • The Gender Reversal

5. Expansion • Formal schooling is now the basis of social mobility and status attainment • Increase in years of schooling completed • Changes in quality of schooling

6. Why Has American Education Worked?

7. Goldin and Katz – The Race Between Education and Technology • The Human Capital Century • Virtuous Cycle: • Public Funding Public Provision Separation of Church and State • Education as the Engine of Growth

8. What If It’s All Just Credentialism? Or Something Worse? • Wolf, A. 2003. “Does Education Matter? Myths about Education and Economic Growth”. Economic Affairs 23, (2): 57-8. • What if the links between education, productivity, and prosperity and growth aren’t what we (and Obama) think they are? • What if universities select on class more than on ability? • What if employers use credentials for prestige more than for skills (or even trainability)? • What if gatekeepers keep talented people out?

9. These processes are probably less prevalent than they once were, but they are operative in some markets.

10. Relationship Between Educational Expansion and Economic Growth is Ambiguous and Contingent • Chabbott and Ramirez • primary and secondary schooling have stronger effects on economic development than does higher education • economic effects of expanded schooling are stronger for poorer countries • Vocational schooling often has more payoff than does academic education. • greater enrollments in science and engineering positively influence economic development

11. Barro – • In a sample of 98 countries from 1960-1985, economic growth was more an outcome of the initial level of human capital in the society than it was a result of the expansion of any level of the educational system. • Having lots of educated people around enhances economic growth

12. Portugal • Poorest and least educated country in Western Europe • 28% of those aged 25-64 has completed high school, Germany has 85% and Czech Republic 91% • May lack the human capital to grow its way out of the current economic crisis

13. Ireland • Despite current banking crisis, their last decade’s investment in technical education has attracted business and made nation far richer than it would otherwise have been

14. Some Complications • As a development policy, educational expansion has distributional effects as well as productive effects. Can expect winners and losers. Maximally maintained inequality. • Educational policies of any sort have to be coupled with employment and welfare policies. Ongoing polarization of employment. • “What works” will vary across settings.

15. The Gender Reversal • Three-quarters of American high school valedictorians are female, but only one-quarter of those in STEM jobs are female • Why haven’t economic gains for women kept pace with educational gains? • Still, gains for women are significant, but this is not generally true for racial and ethnic minorities

16. American Higher Education Under Fire: A Nation at Risk Again • Recent Titles: • Higher Education? How Colleges Are Wasting Our Money and Failing Our Kids---and What We Can Do About It • Crisis on Campus: A Bold Plan for Reforming Our Colleges and Universities • The Five-Year Party: How Colleges Have Given Up on Educating Your Child and What You Can Do About It

17. Arum and Roksa Academically Adrift: Limited Learning on College Campuses • Too many undergraduate students are not working hard and not learning much • Students (and their professors) are too often under-motivated • German data suggest much the same for academic higher education, although their apprentices are working hard • Difference of course is cost of American and German higher education

18. Danger Signs in American Higher Education • U.S. no longer leads the world in higher education participation rates • Participation and degree attainment rates have leveled off and may even be declining in some larger states • Public funding for higher education has declined in the U.S. even as it has increased elsewhere • Fewer young Americans are entering STEM fields relative to our economic competitors

19. What of Graduate Education? Have We Lost Our Edge? • Research enterprise remains strong • Brown, Lauder, and Ashton – The Global Auction: The Broken Promises of Education, Jobs, and Incomes • “Digital Taylorism” high skills and low pay • Quality of (and commitment to) higher education elsewhere is increasing. China wants to eventually create 20 MITs

20. As important as the decline in postsecondary participation is the lack of integration between educational policy and broader national economic and social policy

21. What Do We Need to Know? A Couple of Priors • Higher Education is not only for the purpose of social mobility or even human capital development. Are civic, cultural, and other quality of life benefits. • Need a substantial tolerance for ambiguity and contingency

22. We know about individual returns to education, but need to know more about social returns. • Is evidence, for instance, that regional universities have strong effects on regional employment (Lendel 2010) • Strong evidence for spillover effects. Less-educated workers in areas with lots of more-educated workers tend to have higher incomes

23. Need to conceptualize our object of study as systems of skill development, not simply as higher education – What human capital policies best foster skill enhancement, and what skills should be enhanced? National and regional systems of skill enhancement are closely linked to other political, economic, and social institutions. • Community colleges, apprenticeships, partnerships, company training, industry certification, on-the-job training, etc., but also welfare state, production strategies, party politics, etc. • So we need to understand different national and regional strategies of skill-building reform

24. Varieties of Capitalism • Firms need to solve five coordination problems • Industrial relations • Vocational training and education • Corporate governance • Inter-firm relations • Coordinating employees

25. We Need More and Better Data • How do employers get skills? When do they make and when do they buy? • How do we manage transitions between statuses (school, work, training, unemployment, child-rearing, retirement)? Gunther Schmidt’s “transitional labor markets” • How do we structure the sub-baccalaureate labor force, where much of the action will be?

26. Thank you for your attention