College Productivity

A "tip sheet" prepared by HCM Strategists for Making Opportunity Affordable.

This report discusses performance funding strategies with state examples provided.

A report commissioned by Arthur M. Hauptman and Young Kim and Jobs for the Future to provide an international perspective on the productivity agenda of Making Opportunity Affordable. Hauptman and Kim compare and analyze data on:

• Cost: The amount that countries spend on tertiary education per student;
• Commitment: The share of GDP a country spends tertiary education; and
• Attainment: The share of working-age adults holding a tertiary education degree.

For years, the United States has led the world in the percentage of adults possessing a college degree. This leadership has propelled the national economy to unprecedented levels, harnessing knowledge to drive innovation and improve social mobility. But the nation’s competitive advantage is slipping away:

• According to the Organisation for Economic Cooperation and Development (OECD), the United States now ranks tenth among industrialized nations in the percentage of 25-34 year olds with an Associate’s degree or higher, and stands as one of the only nations where older adults are more educated than younger adults.
• OECD data also show that the United States ranks near the bottom of industrialized nations in the percentage of entering students that complete a degree program.
• According to the U.S. Census, disparities in educational attainment persist across racial and ethnic groups, even as the nation’s population becomes more diverse. Today, 42 percent of whites ages 25-64 have an Associate’s degree or higher, compared with 26 percent of African Americans and 18 percent of Hispanics.

Looking ahead, the United States will have to ramp up just to keep up when it comes to degree production. The National Center for Higher Education Management Systems (NCHEMS) estimates that the nation will produce approximately 48 million new undergraduate degrees between 2005 and 2025, assuming no significant change in degree completion patterns. According to this analysis, the United States needs to produce approximately 64 million additional degrees over this period to match leading nations in the percentage of adults with a college degree (estimated at 55 percent) and to meet domestic workforce needs—a gap of 16 million degrees. Because demographic trends point toward substantial growth in populations historically underserved in higher education—African Americans and Hispanics in particular—this looming degree gap cannot be filled without a strong commitment to erasing racial and ethnic disparities in educational attainment. NCHEMS estimates that increasing the percentage of adults with college degrees among African Americans and Hispanics to that of whites would produce more than half of the degrees needed to fill the projected gap.