Magazine article Economic Trends

Educational Attainment and Employment

Magazine article Economic Trends

Educational Attainment and Employment

Article excerpt

03.02.11

Labor market experiences can be highly varied for individuals with different levels of educational attainment. Higher levels of educational attainment tend to be associated with higher wages, and there is evidence that the benefits of a degree have been increasing in recent decades in the United States. For example, the wages of high school dropouts have dropped since the early 1970s, while the wages of college graduates relative to high school graduates have increased. Empirical facts like these make it unsurprising that a great deal of attention has recently been focused on the relative performance of American students in terms of both educational attainment and achievement.

Given this changing wage structure, a natural issue to investigate is whether other employment outcomes have also changed by education levels over time. A look at labor force participation rates and unemployment patterns using data from the Bureau of Labor Statistics shows they have.

First we see that high school dropouts have actually increased their labor force participation slightly since the early nineties, despite their decreasing wages. This contrasts with all other education groups, which all experienced gradual decreases in labor force participation rates. What may be most striking about this picture is the huge gap between high school dropouts and all other groups, which is very gradually closing.

Once individuals decide to participate in the labor market, how do their experiences differ by educational attainment? …

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