Magazine article Economic Trends

Differences in Educational Attainment across States

Magazine article Economic Trends

Differences in Educational Attainment across States

Article excerpt

Human capital is the term economists use to describe the skills and knowledge of a worker or, more broadly, of the workforce. It is a main determinant of economic growth for a country or a region. The relationship between economic growth and human capital is well established in economics (and is the subject of the Federal Reserve Bank of Cleveland's 2005 Annual Report). While human capital is difficult to measure, economists often use data on educational attainment as a proxy for the amount of human capital in a region or country

In the United States, there are considerable differences in educational attainment across regions and states. This is especially true when one focuses on differences in the share of the adult population with either four-year or advanced degrees. Currently, states with the lowest educational attainment levels include West Virginia and Arkansas, where the shares of the adult population with a four-year college degree are 16.5 percent and 18.2 percent, respectively. States with the highest educational attainment levels (above 35 percent) are in the Northeast and Mid-Atlantic, with Massachusetts and Maryland topping the list. In 2006, the most educated states had roughly twice the proportion of adults with a college degree compared to the least educated states.

A similar pattern is apparent when one examines the share of the population with advanced degrees--a masters degree or above. About 1 in 10 adults over 25 years old has an advanced degree in the United States. Northeast and Mid-Atlantic states generally have high shares of adults with advanced degrees. Colorado and Washington also have relatively high shares. States with relatively low shares are located in the Mid-South and in the Northern Plains.

Of the Fourth District states, Pennsylvania has the highest share of adults with four-year college and advanced degrees, while West Virginia has the lowest. For both four-year and advanced degrees, Ohio is in the second-lowest quintile of states--ranked 38th for 4-year degrees, and 33rd for advanced degrees. Kentucky is in the lowest quintile in the case of 4-year degrees and second-lowest quintile in the case of advanced degrees.

Comparing the data from the 2006 American Community Survey to the 2000 Decennial Census, the average state increased the share of its adult population with a college degree from 23.8 percent to 26.3 percent--a 10.5 percent increase--as well as its share of those with advanced degrees, from 8.4 percent to 9.5 percent--a 13.1 percent rise. Depending upon the measure of variation used to describe the spread of the data, the overall across-state variation in education rates either held steady (the coefficient of variation) or rose (the variance). The difference between these two measures is that the coefficient of variation normalizes the variance by the mean of a variable and thus adjusts for the rise in the mean between 2000 and 2006. The key point is that this steady-to-rising variation in the state education data indicates that differences in state educational attainment rates persisted over the period 2000 to 2006.

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Moreover, growth in the share of the adult population with a four-year degree also differed markedly across states. …

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