presentation 9-21-10

8/8/2019 Presentation 9-21-10

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Luxembourg Income StudyWorking Paper Series

Luxembourg Income Study (LIS), asbl

Working Paper No. 517

Public Policies and the Middle Classthroughout the World in the Mid 2000s

Steven Pressman

July 2009


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20

times of unemployment, we would expect to see declines in the number of hours worked

and the number of weeks worked full-time during the year. As a result, the middle class

should shrink. Unfortunately, such labor market variables are rare in the LIS, and only

Finland and the US have relevant data in Wave #6 to perform such an analysis.

My shift-share analysis for Finland found no change in the size of the Finnish

middle class as a result of changes in either weeks worked part-time or full-time, or due

to weeks unemployed by either the household head or spouse. For the US, there was also

virtually no change due to hours worked per week, or due to weeks employed full-time or

part-time by either the household head or spouse. In all cases, the results were so small

(.1 percentage point or zero) and could have been due to rounding. Only for weeks

employed full-time by household heads in the US did this labor market change push up

the size of the middle class by .2 percentage points. But this is still not a large change in

the middle class stemming from labor market changes. (These results are available from

the author upon request.)

7. SUMMARY AND CONCLUSION

This study has used the LIS to examine the size of the middle class across nations and

over time. Its main conclusions support the arguments made in Pressman (2007). A main

finding is that in the mid 2000s the size of a countrys middle class depends to a large

extent on the government tax and spending policy. The size of the national middle class is

pretty much the same looking at either factor income or market income, and it is also

relatively low (less than 20 percent) in all developed countries. Only with generous

government transfers and progressive taxes does the middle class grow to close to half

the nations households. This paper expands on my earlier work by identifying the


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TABLE # 3

MIDDLE-CLASS (as a percentage of all households) UNDER ALTERNATIVE DEFINITIONS

OF MIDDLE CLASS

COUNTRY MAIN D2 D3 D4

Australia 29,1% 39,7% 48,2% 53,9%

Canada 34,9% 46,4% 54,0% 59,0%

Denmark 48,7% 62,8% 70,6% 74,1%

Finland 43,5% 56,4% 64,0% 68,4%

Luxembourg 41,7% 53,9% 61,1% 64,9%

Mexico 24,7% 32,1% 38,5% 42,6%

Norway 46,5% 60,9% 67,8% 70,9%

Sweden 48,5% 62,9% 91,9% 95,2%

Taiwan 36,2% 46,8% 53,8% 58,6%

UK 33,8% 45,5% 52,6% 57,6%

US 28,7% 39,0% 46,5% 51,8%

Averages

(unweighted)37,8% 49,7% 59,0% 63,4%

Source: Author's calculations from the Luxembourg Income Study

Note: Main definition is median adjusted household income (median) 25%median; D2 = 75% median>medianmedianmedian


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TABLE#2

MIDDLECLASSHOUSEHOLDS(ASAPERCENTAGEOFALLH

COUNTRY

MiddleClass

Households

withChildren

MiddleClass

Households

withChildren

(SubtractingChild

Allowances)

MiddleClass

Householdswith

Children

(Subtracting

AlimonyandChild

Support)

MiddleClass

Householdswith

Children

(SubstractingFamily

Leave)

AUSTRALIA 39,4% 34,2% 38,6% 36,9%

CANADA 38,5% 36,4% 37,7% 38,5%

DENMARK 60,0% 56,5% 57,8% 58,2%

FINLAND 53,1% 48,6% 52,6% 50,3%LUXEMBOURG 42,0% 32,2% N.A. 42,0%

NORWAY 59,1% 52,7% 59,0% 53,8%

SWEDEN 58,2% 53,3% 55,2% 52,8%

UK 37,6% 35,5% 37,0% 37,5%

US 32,0% 32,0% 31,6% 32,0%

AVERAGES

(unweighted) 46,7% 42,4% 46,2% 44,7%

Source: Author'scalculationsfromtheLuxembourgIncomeStudy


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Understanding Mobility in America

Understanding Mobility

in America

Tom Hertz, American University

ProgressiveIdeasfo

raStrong,

Just,andFreeA

merica


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Understanding Mobility in America

SummaryThis report discusses two aspects ofeconomic mobility in the United States. The rst is the

question ofintergenerational mobility, or the degree to which the economic success of children is

independent of the economic status of their parents. A higher level of intergenerational mobility is

often interpreted as a sign of greater fairness, orequality of opportunity, in a society.

The second aspect is the short-term question of the amount by which family incomes change from

year to year. By studyingshort-term mobility we can determine whether incomes are rising or

falling for families at different points in the income distribution. We can also determine whether

the size of these income variations, or the level ofannual income volatility, is changing over time.

Increased volatility is undesirable to the extent that it represents an increase in economic insecurity.

The key ndings relating to intergenerational mobility include the following:

Children from low-income families have only a 1 percent chance of reaching the top

5 percent of the income distribution, versus children of the rich who have about a 22

percent chance.

Children born to the middle quintile of parental family income ($42,000 to $54,300)

had about the same chance of ending up in a lower quintile than their parents (39.5

percent) as they did of moving to a higher quintile (36.5 percent). Their chances of

attaining the top ve percentiles of the income distribution were just 1.8 percent.

Education, race, health and state of residence are four key channels by which

economic status is transmitted from parent to child.

African American children who are born in the bottom quartile are nearly twice as

likely to remain there as adults than are white children whose parents had identicalincomes, and are four times less likely to attain the top quartile.

The difference in mobility for blacks and whites persists even after controlling for

a host of parental background factors, childrens education and health, as well as

whether the household was female-headed or receiving public assistance.

After controlling for a host of parental background variables, upward mobility varied

by region of origin, and is highest (in percentage terms) for those who grew up in the

South Atlantic and East South Central regions, and lowest for those raised in the West

South Central and Mountain regions.

By international standards, the United States has an unusually low level of

intergenerational mobility: our parents income is highly predictive of our incomes

as adults. Intergenerational mobility in the United States is lower than in France,

Germany, Sweden, Canada, Finland, Norway and Denmark. Among high-income

countries for which comparable estimates are available, only the United Kingdom

had a lower rate of mobility than the United States.

i


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2 Understanding Mobility in America

The second kind of mobility we will study is the amount by which family incomes change from

year to year. By studyingshort-term mobility we can determine whether incomes are rising or

falling for families at different points in the income distribution. We can also determine whether

the size of these income variations, or the level ofannual income volatility, is changing over time.

Increased volatility is undesirable to the extent that it represents an increase in economic insecurity.

In particular, we will show that the frequency of large negative income shocks has risen markedly

since the early 1990s. This analysis conrms the ndings of Hacker (forthcoming), but uses a muchlarger and nationally representative dataset, allowing for a more detailed and precise analysis of the

size and direction of annual income changes at different points in the income distribution. Using the

annual data we are also able to test for a relation between labor market effort and upward mobility.

Intergenerational mobility in the United States

While few would deny that it ispossible to start poor and end rich, the evidence suggests that this

feat is more difcult to accomplish in the United States than in other high-income nations. This

claim is based on cross-country comparisons of the intergenerational elasticity of earnings, a

statistic that measures the percentage difference in expected child earnings that is associated witha one percent difference in parental earnings. Higher elasticities mean less mobility: they imply

that parental income matters more, or that the children of the poor are more likely to remain poor.1

Figure 2, below, displays the intergenerational elasticity of earnings between fathers and sons

for nine upper-income countries, and shows that the United States and the United Kingdom are

especially immobile.

Figure 2: International

Estimates of the Father-Son Earnings Elasticity

The elasticity is closely related to the intergenerational correlation coefcient, the difference being that the correlatio

scales the elasticity to take account of any changes over time in the level of inequality.

Source: Corak (2004)Source: Corak (2004)

United Kingdom

United States

France

Germany

Sweden

Canada

Finland

Norway

Denmark

0 0.1 0.2 0.3 0.4 0.5 0.6

0.15

0.17

0.18

0.19

0.27

0.32

0.41

0.47

0.5

Figure 2: International Estimates of theFather-Son Earnings Elasticity

Source: Corak (2004)


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The Polarization of Job Opportunities

in the U.S. Labor MarketImplications for Employment and Earnings

David Autor, MIT Department of Economics and National Bureau of Economic Research

April 2010

istockphoto/mrloz

istockphoto/pastoor


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he amilton roject | www.hamiltonproject.org 1

Introduction and summary

Between December 2007, when the U.S. housing andfinancial crises became the subject of daily news headlines,

and March of 2010, the latest period for which data are

available, the number of employed workers in the United

States fell by 8.2 million, to 129.8 million from 138.0 mil-

lion. In the same interval, the civilian unemployment rate

nearly doubled, to 9.7 percent from 5.0 percent, while the

employment-to-population ratio dropped to 58.6 percent

from 62.7 percentthe lowest level seen in more than 25

years. Job losses of this magnitude cause enormous harm

to workers, families, and communities.1

A classic study by economists Lou Jacobson, Robert LaLonde,

and Daniel Sullivan found that workers involuntary displaced

by plant downsizings in Pennsylvania during the severe reces-

sion of the early 1980s suered annual earnings losses averag-

ing 25 percent, even six years following displacement.2 Te

nonpecuniary consequences of job losses due to the Great

Recession may be just as severe. Studying the same group of

workers with the benet of 15 more years of data, labor econ-

omists Daniel Sullivan and co-author ill Von Wachter3 show

that involuntarily job displacement approximately doubled

the short-term mortality rates of those displaced and reduced

their life expectancy on average by one to one and a half years.

Tus, long aer the U.S. unemployment rate recedes into sin-

gle digits, the costs of the Great Recession will endure.

Despite the extremely adverse U.S. employment situation in

2010, history suggests that employment will eventually return

and unemployment will eventually subside. But the key chal-

lenges facing the U.S. labor marketalmost all of which wereevident prior to the Great Recessionwill surely endure.

Tese challenges are two-fold. Te rst is that for some decades

now, the U.S. labor market has experienced increased demand

for skilled workers. During times like the 1950s and 1960s, a

rising level of educational aainment kept up with this rising

demand for skill. But since the late 1970s and early 1980s, the

rise in U.S. education levels has not kept up with the rising

demand for skilled workers, and the slowdown in educational

aainment has been particularly severe for males. Te result

has been a sharp rise in the inequality of wages.

A second, equally signicant challenge is that the structure of

job opportunities in the United States has sharply polarized

over the past two decades, with expanding job opportunities

in both high-skill, high-wage occupations and low-skill, low-

wage occupations, coupled with contracting opportunities in

middle-wage, middle-skill white-collar and blue-collar jobs.

Concretely, employment and earnings are rising in both high-

education professional, technical, and managerial occupa-

tions and, since the late 1980s, in low-education food service,

personal care, and protective service occupations. Conversely,

job opportunities are declining in both middle-skill, white-

collar clerical, administrative, and sales occupations and in

middle-skill, blue-collar production, cra, and operative

occupations. Te decline in middle-skill jobs has been detri-

mental to the earnings and labor force participation rates of

workers without a four-year college education, and dieren-

tially so for males, who are increasingly concentrated in low-

paying service occupations.


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2 enter for merican rogre | www.americanprogre.org

he olarization of Job pportunitie in the U.s. abor arket

Tis paper analyzes the state of the U.S. labor market over

the past three decades to inform policymaking on two fronts.

Te rst is to rigorously document and place in historical and

international context the trajectory of the U.S. labor market,

focusing on the evolving earnings, employment rates, and

labor market opportunities for workers with low, moderate,

and high levels of education. Te second is to illuminate the

key forces shaping this trajectory, including:

Te slowing rate of four-year college degree aainment

among young adults, particularly males

Shis in the gender and racial composition of the workforce

Changes in technology, international trade, and the inter-

national oshoring of jobs, which aect job opportunities

and skill demands

Changes in U.S. labor market institutions aecting wage set-

ting, including labor unions and minimum wage legislation

Te causes and consequences of these trends in U.S. employ-

ment paerns are explored in detail below, but the main con-

clusions can be summarized as follows:

Employment growth is polarizing, with job opportunities

concentrated in relatively high-skill, high-wage jobs and

low-skill, low-wage jobs.

Tis employment polarization is widespread across industri-

alized economies; it is not a uniquely American phenomenon.

Te key contributors to job polarization are the automa-

tion of routine work and, to a smaller extent, the interna-

tional integration of labor markets through trade and, more

recently, oshoring.

Te Great Recession has quantitatively but not qualitatively

changed the trend toward employment polarization in the

U.S. labor market. Employment losses during the recession

have been far more severe in middle-skilled white- and

blue-collar jobs than in either high-skill, white-collar jobs

or in low-skill service occupations.

As is well known, the earnings of college-educated workers

relative to high school-educated workers have risen steadily

for almost three decades.

Less widely discussed is that the rise in the relative earn-

ings of college graduates are due both to rising real earnings

for college workers and falling real earnings for noncollege

workersparticularly noncollege males.

Gains in educational aainment have not generally kept

pace with rising educational returns, particularly for males.

And the slowing pace of educational aainment has contrib-

uted to the rising college versus high school earnings gap.

While these points are eshed out in the body of the paper, I

briey unpack each of them here.

Employment growth is polarizing into

relatively high-skill, high-wage jobs and

low-skill, low-wage jobs

Secular shis in labor demand have led to a pronounced polar-

ization of job opportunities across occupations, with employ-

ment growth concentrated in relatively high-skill, high-wage

and in low-skill, low-wage jobsat the expense of middle-

skill jobs. Tis polarization is depicted in Figure 1, which plots

the change in the share of U.S. employment in each of the last

three decades for 326 detailed occupations encompassing all of

U.S. employment.4

Tese occupations are ranked on the x-axis by skill level fromlowest to highest, where an occupations skill level (or, more

accurately, its skill rank) is approximated by the average wage

of workers in the occupation in 1980.5 Te y-axis of the gure

corresponds to the change in employment at each occupa-

tional percentile as a share of total U.S. employment during

the decade. Since the sum of shares must equal one in each

decade, the change in these shares across decades must total

zero. Consequently, the gure measures the growth in each

occupations employment relative to the whole.

Tis gure reveals a twisting of the distribution of employ-

ment across occupations over three decades, which becomes

more pronounced in each period. During the 1980s (1979

to 1989), employment growth by occupation was almost

uniformly rising in occupational skill; occupations below the

median skill level declined as a share of employment, while

occupations above the median increased. In the subsequent

decade, this uniformly rising paern gave way to a distinct

paern of polarization. Relative employment growth was


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ntroduction and summary


most rapid at high percentiles, but it was also modestly posi-tive at low percentiles (10th percentile and down) and mod-

estly negative at intermediate percentiles.

Fast forward to the period 1999 to 2007. In this interval,

the growth of low-skill jobs comes to dominate the gure.

Employment growth in this period was heavily concentrated

among the lowest three deciles of occupations. In deciles

four through nine, growth in employment shares was nega-

tive. In the highest decile of occupations, employment shares

were at. Tus, the disproportionate growth of low-educa-

tion, low-wage occupations becomes evident in the 1990s

and accelerates thereaer.

Notably, this paern of employment polarization has a coun-

terpart in wage growth. Tis may be seen in Figure 2, which

plots changes in real hourly wages relative to the median by

wage percentile for all U.S. workers over two time periods:

1974 to 1988 and 1988 to 2006.6 In the 1974 through 1988

period, wage growth was consistently increasing in wage per-

centile; wages at percentiles above the median rose relativeto the median while wages below the median fell. From 1988

forward, however, the paern was U-shaped. Wages both

above andbelow the median rose relative to the median.

In short, wage gains in the middle of the distribution were

smaller than wage gains at either the upper or lower reaches of

the wage distribution. Tis simultaneous polarization of U.S.

employment and wage growth suggests an important theme,

explored in detail belowlabor demand appears to be rising

for both high-skill, high-wage jobs and for traditionally low-

skill, low-wage jobs.

Employment polarization is widespread across

industrialized economies

Te polarization of employment across occupations is not

unique to the United States, but rather is widespread across

industrialized economies. Evidence of this fact is presented

Source: Data are Census IPUMS 5 percent samples for years 1980, 1990, and 2000, and U.S. Census

American Community Survey 2008. All occupation and earnings measures in these samples refer to

prior years employment. The gure plots log changes in employment shares by 1980 occupational skill

percentile rank using a locally weighted smoothing regression (bandwidth 0.8 with 100 o bservations),

where skill percentiles are measured as the employment-weighted percentile rank of an occupations

mean log wage in the Census IPUMS 1980 5 percent extract. Mean education in each occupation is

calculated using workershours of annual labor supply times the Census sampling weight. Consistent

occupation codes for Census years 1980, 1990, and 2000, and 2008 are from Autor and Dorn (2009a).

IURE 1

Smoothed changes in employment by

occupational skill percentile, 19792007

Change in employment share

Skill percentile (ranked by occupational mean wage)

25%

20%

15%

10%

5%

0%

-5%

0 6020 8040 100

19791989 19891999 19992007

Source: May/OR CPS data for earnings years 1973-2009. Each year comprises a three-year moving

average (e.g. 1974 contains May/OR data from 1973, 1974, and 1975), with years equally weighted. The

real log hourly wage is computed by year for each percentile between the 5th and 95th percentiles. In

every year, real log hourly wages are adjusted such that they equal zero at the respective years median

(50th percentile). The percent change represents the dierence in the log wages values (relative to the

median) at each percentile between the relevant years.

See Data Appendix for more details on treatment of May/OR CPS data.

IURE 2

Percent changes in male and female hourly wages

relative to the median

Percent change relative to the median

Hourly earnings percentile

15%

10%

5%

0%

-5%

-10%

-15%

19741988 19882006

5 20 35 50 65 80 95


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ntroduction and summary


trade and oshoring, de-unionization, and a falling mini-

mum wage. Te section that follows further documents that

the polarization of employment is not unique to the U.S. but

rather is widespread among European Union economies.

Te paper then steps back from this detailed portrait of polar-

ization to explore the overriding role of labor demand shis

in explaining the sharp changes in earnings and employ-

ment levels by education and sex. Tis section shows that

the rising wages of college-educated workers relative to high

school-educated workers can in large part be explained by

a long-term, secular rise in the demand for college workers

coupled with a sharp decline in the entry of new college

workers in the U.S. labor market starting in the late 1970s.

Tis section highlights that a major proximate cause of this

slowdown is the sharp deceleration in the rate of college

aainment among young males starting in the late 1970s, thereasons for which are only poorly understood.

Te nal section explores earnings by education level in

greater detail to document that the simple college versus

high school earnings dichotomy masks a highly consequen-

tial development: Te rising demand for education appears

to be limited to very high levels of education. Workers with

less than a four-year college education, and particularly non-

college males, experienced stagnant or in some cases declin-

ing earnings over the past three decades. I link these striking

wage developments to the polarization of employment, argu-

ing that declining opportunities in middle-skill jobs help

to explain why wages are rising for highly educated work-

ers whiles wages for middle- and low-educated workers are

growing less rapidly and, moreover, converging toward one

another. Te paper then oers concluding observations.


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10 enter for merican rogre | www.americanprogre.org

he olarization of Job pportunitie in the U.s. abor arket

Sex differences in job polarization

Te polarization of employment into low- and high-skill

occupations has unfolded with increasing velocity over the

past two decades. But this polarization did not occur evenly

among the sexes, as is shown in Figure 4.

Te rst set of columns in Figure 4 plot the change between

1979 and 2007 in the share of employment in high-, middle-,

and low-skill occupations among each sex. Te share of male

employment in middle-skill occupations dropped by 7.0 per-

cent. For females, the fall was even larger at 15.8 percent. Yet

this hollowing out of the occupational distribution had dif-

ferent consequences for the sexes. Females moved dramati-

cally upward in the occupational distribution as they departed

the center. Male employment instead moved in roughly equal

measures to the tails of the distributionthat is, to high-wage, high-skill and low-wage, low-skill jobs.

Te second set of bars in Figure 4 breaks these paerns by edu-

cation group, showing that the share of males with no more

than a high school education employed in middle-skill occupa-

tions dropped by 3.9 percent between 1979 and 2007. More

than the entirety of this decline is accounted for by a corre-

sponding rise in employment in low-skill service occupations.

Simultaneously, the share of employment among males with

some college education declined in both middle- and high-

skill occupations. Even among males with a four-year col-

lege degree, employment in high-wage occupations declined

noticeably, with the slack taken up approximately evenly by

middle- and low-skill occupations.

Some portion of this occupational shi is arguably mechani-

cal. As the share of workers with higher educations rises, it

is inevitable that some subset will take traditionally noncol-

lege jobs. Put simply, when a third of the workforce is college

educated, not all college-educated workers will be managers

or professionals. Nevertheless, the decline of middle-skill

jobs has clearly displaced males toward the tails of the occu-pational distribution. And the net eect is an increase in the

share of males in low-skill occupations compared to the share

of males in high-skill occupations.

Figure 4 paints a more encouraging picture for females.

Women with less than a four-year college degree experienced

Source: May/OR CPS data for earnings years 1979-2007. See note to igure 12. The 10 broad occupations are classied as belonging to one of three broad skill groups.

IURE 4

Changes in occupational employment shares by education and sex, 19792007

Males

Females

Percentage change in occupational employment shares

-20%

-16%

-12%

-8%

-4%

0%

4%

8%

12%

16%

20%

All

Low

Occupation skill group Occupation skill group Occupation skill group Occupation skill group

Medium High Low Medium High Low Medium High Low Medium High

High school or less Some college College +

Definitions of skill groups

High skill: Managerial, professional, and technical occupations

Medium skill: Sales, office/admin, production, and operators

Low skill: Protective service, food prep, janitorial/cleaning, personal care/services


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Into the Eye of the Storm:

Assessing the Evidence on Science and Engineering

Education, Quality, and Workforce Demand

October 2007

B. Lindsay Lowell

Georgetown [email protected]

Hal Salzman

The Urban [email protected]

An earlier version of this paper was presented at the meetings of the Association for Public PolicyAnalysis and Management, October 2006. We would like to thank the session participants for their

feedback. We also benefited from review of an earlier version of this paper by Michael Feuer, Richard

Freeman, Richard Fry, Chris Hill, Robert Lerman, David Mandel, Steve Merrill, and Mark Regets.

Funding for this research came from the Alfred P. Sloan Foundation and the National Science Foundation

(Human and Social Dynamics Program, SES-0527584). Research assistance was provided by Everett

Henderson, Daniel Kuehn, and Katie Vinopal.

Copyright October 2007. The Urban Institute. All rights reserved. Except for short quotes, no part of

this report may be reproduced or utilized in any form or by any means, electronic or mechanical,

including photocopying, recording, or by information storage or retrieval system, without written

permission from the Urban Institute.

The Urban Institute is a nonprofit, nonpartisan policy research and educational organization that examines

the social, economic, and governance problems facing the nation. The views expressed are those of the

authors and should not be attributed to the Urban Institute, its trustees, or its funders.


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ii

Abstract

Several high-level committees have concluded that current domestic and global trends are

threatening Americas global science and engineering (S&E) preeminence. Of the challenges

discussed, few are thought to be as serious as the purported decline in the supply of high quality

students from the beginning to the end of the S&E pipelinea decline brought about by

declining emphasis on math and science education, coupled with a supposed declining interest

among domestic students in S&E careers.

However, our review of the data fails to find support for those presumptions. Rather, the

available data indicate increases in the absolute numbers of secondary school graduates and

increases in their math and science performance levels. Domestic and international trends

suggest that that U.S. schools show steady improvement in math and science, the U.S. is not at

any particular disadvantage compared with most nations, and the supply of S&E-qualified

graduates is large and ranks among the best internationally. Further, the number of

undergraduates completing S&E studies has grown, and the number of S&E graduates remains

high by historical standards. Why, then, is there a purported failure to meet the demand for S&E

college students and S&E workers?

Analysis of the flow of students up through the S&E pipeline, when it reaches the labor market,

suggests the education system produces qualified graduates far in excess of demand: S&E

occupations make up only about one-twentieth of all workers, and each year there are more than

three times as many S&E four-year college graduates as S&E job openings. So it is not clear,

even if there were deficiencies in students average S&E performance, that such deficiencies

would necessarily be insufficient to meet the requisite S&E demand. While improving average

math and science education at the K12 level may be warranted for other reasons, such a strategy

may not be the most efficient means of supplying the S&E workforce.

Workforce development and education policy requires a more thorough analysis than appears to

be guiding current policy reports. The available evidence points, first, to a need for targeted

education policy, to focus on the populations in the lower portion of the performance

distribution. Second, the seemingly more-than-adequate supply of qualified college graduates

suggests a need for better understanding why the demand side fails to induce more graduates

into the S&E workforce. Third, public and private investment should be balanced between

domestic development of S&E workforce supply and global collaboration as a longer-term goal.

Policy approaches to human capital development and employment from prior eras do not address

the current workforce or economic policy needs.


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32

not increased notably from the 1980s to the present day, albeit about one-tenth of college

freshman require science and one-fifth require some math remediation (NSF 2006, table 2).

Still, students with low achievement may lead to low postgraduate transition and retention rates,

which could be consistent with the findings of S&E education suffering from poor pedagogy,

inadequate educational systems, or simply a surfeit of low performers who somehow make it into

S&E fields of study. Table 3 examines the possibility that large numbers of S&E graduates have

poor grades and, despite having a degree in hand, are not adequately prepared to either continue

further S&E studies or take S&E employment. It shows that slightly higher performing students

continue on an S&E pathway after graduation, but there is no dramatic change between 1995 and

2001. Only about a quarter of S&E bachelors students with less than a 2.75 GPA stay on an

S&E trajectory, while about a third of those with better GPAs stay the course. Similarly, about

half of S&E masters students with less than a 2.75 GPA stay on an S&E trajectory, while nearly

two-thirds of those with better GPAs stay the course. However, for those who enter the job

market at each stage, a greater proportion of low-GPA graduates find S&E employment than do

high-GPA students. The lower rate of job entry by high GPA graduates is due, in part, to higher

GPA students continuing their education rather than entering the job market. However, the lower

rate may also be the result of higher GPA students entering other, non-S&E careers (a point we

are examining in current research). A low GPA is apparently not a bar to finding S&E

1995 2001 1995 2001 1995 2001

Bachelors 698,200 758,300 28.8 33.4 71.2 66.53.754.0 83,400 116,900 36.2 35.7 63.8 64.42.753.74 524,300 566,100 28.3 33.6 71.8 66.3Less than 2.75 89,400 74,400 25.4 28.6 74.8 71.4

Masters 146,300 160,100 62.1 62.8 37.9 37.13.754.0 33,600 41,800 68.4 66.2 31.7 33.82.753.74 100,600 109,200 60.6 62.4 39.5 37.7Less than 2.75 11,300 8,300 55.3 51 44.7 49

SOURCE: Adapted from National Science Foundation, Division of Science Resources Statistics, National Survey of Recent

College Graduates, 1995 and 2001, special tabulations, Table 2-9, 2003. Science & Engineering Indicators 2004. Due to

rounding percents may not add to one hundred

Degree level & GPA

1995 and 2001

Table 3. Employment and Education Status of S&E Degree Recipients by Degree and GPA

Graduates

% In S&E

(Employed or Continuing in S&EMajor in School)

% Employed in S&E

(of those employed)


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graduates in all fields may not perceive their education as highly related to their occupation, and

thus additional measures are needed to better understand the specific contribution of an S&E

education to employment in non-S&E fields.

In short, the U.S has been graduating more S&E students than there have been S&E jobs; hence,

there are 15.7 million workers who report at least one degree in an S&E field but 4.8 million

workers in an S&E occupation. There is, rather obviously, high attrition from school to work,

and it simply cannot be explained by underachieving S&E graduates failing to qualify for jobs.

At the same time, many of the S&E graduates outside of a formal S&E job may benefit from

their training, but the simple indicators used here suggest that such training is not central to their

current employment. This evidence suggests that the school-to-work attrition is neither due to

poor educational preparation or, more optimistically, to the failure of formal occupational

classifications to capture the extent to which S&E training is used in the labor market. Something

else appears to be going on.

The S&E Job Market: What is the Nature of the Demand?

The pathway from high school student to college graduate has a number of transition points that

are the primary focus of current policy initiatives. The goal of these initiatives is to increase theflow into, and retention within the S&E education pipeline. However, the data we have reviewed

suggest that secondary and higher education systems are providing more than adequate supply

for industrys hiring needs. Of course, these are aggregate numbers, so there still could be

shortages for particular occupations or industries; targeted initiatives to increase the flow of

underrepresented demographic and income groups are warranted to increase workforce

opportunity and workforce diversity. But overall, addressing the presumed labor market

problems through a broad-based focus on the education system seems a misplaced effort.

Whether increasing the supply of S&E educated workforce entrants would have any significant

impact on workforce supply (given a graduate pool already 50 percent larger than annual

openings) is a question that requires a better understanding of the labor market for these

graduates. Moreover, increasing the education supply with such low yields seems a highly

presentation 9-21-10

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