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U.S. EDUCATION LEVELS EXPECTED TO DECLINE SHARPLY WHEN BABY BOOMERS RETIRE: Decrease in Education Attainment Would Have Profound Effects on U.S. and State Economies

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"Education is one of the most effective interventions for improving our social and economic future-for individuals, communities, states, and the country as a whole."

Americans are generally aware that educational disparities exist between whites and other racial and ethnic populations, but they are largely unaware of the social and economic consequences that could result if current educational gaps are not addressed soon, according to a new policy alert from the National Center for Public Policy and Higher Education. The report argues that the United States could lose billions of dollars in personal income as more well-educated Baby Boomers retire and are replaced by workers with less education.

“If the educational gaps remain as they are, then personal income per capita in the United States is projected to decline from $21,591 in 2000 to $21,196 in 2002-a drop of $395 or 2 percent,” the brief reads. “In contrast, according to the Bureau of Economic Analysis, personal income per capita has grown 41 percent nationally during the two decades prior to 2000.”

Based on data from the U.S. Census Bureau, the white working-age population is expected to decline from 82 percent to 63 percent from 1980 to 2020. During the same time, the report found, the minority population of the workforce is expected to double (from 18 percent to 37 percent). In 2000, the percentage of working-age men and women with at least a bachelor’s degree has grown for all racial and ethnic groups, but gaps between Asian Americans and whites versus other minorities have more than doubled.

In 1980, 36 percent of Asian Americans and 20 percent of whites held bachelor’s degrees, compared to 9 percent of African Americans and 8 percent of Hispanics and Native Americans. In 2000, 46 percent of Asian Americans and 30 percent of whites held bachelor’s degrees, compared with only 15 percent for African Americans, 11 percent for Hispanics, and 12 percent for Native Americans. The numbers at the high school level are no better, with 78 percent of whites graduating from high school compared to 56 percent for African Americans and 52 percent for Hispanics.

If the status quo persists, nearly all states are likely to see an increase in the percentage of their residents without a high school diploma. According to the report, states that are projected to have the highest growth in minority populations can expect to see even more residents without a high school diploma, which translates into fewer earnings for the individual worker, but also less tax revenue for the state. For example, the projected decline in personal income per capita from 2000 to 2020 is $662 in Colorado, $1,182 in New York, and $2,475 in California.

The educational decline of Americans is even more severe when one considers that the knowledge-based economy of the 21st century requires that most workers have at least some education after high school. Once a worldwide leader in the education of its citizens, the United States has seen itself drop in relation to its international peers. “As a result,” the report reads, “the young population in the United States is not as well positioned as its counterparts in several other nations to compete for high-skilled jobs.”

“Education is one of the most effective interventions for improving our social and economic future-for individuals, communities, states, and the country as a whole,” the report reads. “Given the changing nature of the global marketplace, the high school diploma is no longer sufficient for individuals seeking good jobs, nor for communities building a vibrant economy. Addressing inequalities in higher education opportunity will require persistent and meaningful efforts by states in order to put in place the policies and resources to advance the education of all their residents.”

The complete brief is available at http://www.highereducation.org/reports/pa_decline/index.shtml.

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