Slowdown in Educational Attainment

We always hear how education is a top priority in today’s economy.  We are told that society needs people to be better educated, and that progress in educating people is slow but steady.  Educational attainment may be rising, but is society doing a good job of ensuring that its young are educated?

The graph below, which is built on data from and reproduces a slightly modified graphic produced by the Census Bureau1, describes how educational attainment has changed across society since 1940.

attain1

 

The graph suggests remarkable improvements in educational attainment over the past seventy years. In 1940, roughly three-quarters of the population dropped out before completing high school, about 5% attended some college and 4.6% completed college. By 2014, only 12% of society had less than a high school education, 27% had some college, and 32% completed college.

The figure suggests that US educational attainment has improved continuously over the past seventy or so years. The smooth transition from a less- to more-educated society seems to have continued unabated. It looks like society has been in a continuous march toward more education.

However, the appearance of a smooth transition to a more educated society is partly an artifact of the data. Overall educational attainment figures include people of different generations, who came of age during during different periods. The inclusion of older generations obfuscates the ways in which society’s young have been educated at different rates.  It will make change look slower and more incremental.

To get a sense of these changing rates at which the young are being educated, it makes sense to focus on educational attainment among young people who are of an age at which college completion is likely. To do this, Census figures look at attainment among those aged 25 to 34.

The figure below shows changing educational enrollment among Americans in this age group. The data source is the same:

attain2

 

This graph provides a different picture to the image of continuous improvement imparted in the first figure. The graph suggests that the pace of increasing educational attainment was much faster in the 1940s through late-1970s, but slowed afterwards.

For example, high school drop outs fell from about 63% of young adults in 1940 to 15% in 1980. From 1980 to 2014, this proportion fell to 10%, a marginal improvement. On one hand, society might be forgiven for not being able to eradicate the phenomenon of dropping out. That final 10% to 15% of drop outs might be a particularly tough group to marshal towards high school completion. On the other hand, society has not made a concerted press for universal high school completion, much in the way that it stamped out illiteracy. It is reluctant to make bigger investments in education, and it is much more reluctant to expand social assistance to those who drop out due to economic pressures. It is hard to tell whether our failure to ensure universal completion is a matter of the problem being too difficult or society not caring enough to do the needed work. In any case, the pace at which minimum educational attainment improved has slowed considerably over the past thirty to forty years.

The proportion of young adults who have only completed high school completion is roughly where it was in 1940. In 1940, it was a result of too many people not having gone far enough in attaining education. By 2014, it was a matter of more people attaining high school and moving on to at least some college.

The pace at which college attainment rose accelerated between 1940 and 1977, and then stalled until the mid-1990s. From then to today, the proportion of young adults with college attainment has grown steadily. The proportion of college graduates grew faster between 1940 to 1977 (3.8% average annual growth) than from 1994 to today (2.1% average annual). Near-college attainment also grew faster before 1977 (2.9% average annual growth rate) than after 1991 (1.4% average annual growth rate).

What can we glean from these figures? Educational attainment rose much more quickly during the mid-20th century than since the mid- to late-1970s. In part, this is probably because the easier work has been done. Conceivably, it is easier to promote high school and college completion when fewer people do it. As rates rise, schools and education policy-makers have to find ways to educate more obstinate cases.

However, I’m not so sure that we should give the past several decades a total pass. Society has shown that it can stamp out obstinate problems if it is sufficiently motivated. We seem to lack that kind of motivation. It is harder to convince society to invest more in education. More people oppose extending economic aid to poor people to help them complete college. We are much less concerned with making college affordable, and more concerned with ensuring that college students don’t get “free rides.”  We might say that we are committed to educating Americans, but this self-image may be at odds with our revealed true preferences.


  1. US Census Bureau (2015) “Table A-1. Years of School Completed by People 25 Years and Over, by Age and Sex: Selected Years 1940 to 2014” Data table downloaded June 2015 from http://www.census.gov/hhes/socdemo/education/data/cps/historical/

Download the raw data and Markdown file

Welfare Spending: Most Goes to Seniors

What is interesting is that a core constituency of these anti-welfare initiatives are in fact society’s biggest welfare recipients: the elderly. We can illustrate that fact by digging into data from the Survey of Consumer Finances.1

Varieties of Welfare

Our first step involves asking, what is welfare? Here, it includes economic transfers from taxpayers to households that qualify for government programs designed to help families who do not earn enough money on their own. There are three major types of social payments programs in the US:

The Distribution of Social Spending, from Center on Budget and Policy Priorities
The Distribution of Social Spending, from Center on Budget and Policy Priorities

Many readers might object to the inclusion of Social Security as a type of welfare program, on the grounds that it is a system into which its recipients have paid. In fact, Social Security is a PAYGO system, in which today’s seniors’ checks are principally funded by the payroll deductions taken from the working populations’ paychecks. Today’s recipients’ payroll deductions were used to pay for the Social Security checks of those who were elderly during their working years. These are current transfers from the working to (largely) non-working population.

Program Costs

One way to gauge how much people are getting from these programs is to look at their costs. The figure to the left was taken from Center on Budget and Policy Priorities

Social Security is by far the most expensive, absorbing nearly one-quarter of the federal budget, along with a substantial part of state budgets. It roughly costs as much as all health care spending (post-Affordable Care Act) and more than double the amount of all remaining social safety net programs combined.

Number of Recipients

The figure below describes the percentage of households receiving any money from these three social payments programs:

g1

The number of people receiving all three types of assistance fell in numbers over the 1990s. In part, this was a byproduct of an extraordinarily long prosperity and strong labor markets. When jobs are bountiful and better paid, fewer people need public assistance.

Since 2001, America’s welfare system – at least the part of it that provides money to poor people – expanded considerably. Social Security recipients grew as a group since the mid-1990s. The proportion of households receiving welfare as cash payments (e.g., TANF, SNAP, traditional welfare checks) has grown steadily since 2001. Workers’ benefits have grown since the 2008 crisis.

Program Generosity

The figure below describes the median take from each of these three program types. This is the median receipts from each program type among all households receiving any money.

g2

The median take from Social Security is by far the biggest and fastest-rising. In 1992, it was just over $8100. By 2013, it stood at $16,740. Payments more than doubled, and did so at a time when incomes stagnated.

The take from workers’ programs also doubled, from $2,480 to $5,120.  This growth has been fueled by largely temporary expansions after the 2008 financial crisis (e.g., extending eligibility for Unemployment Insurance). Many of these program extensions have since expired, and they will probably be lower when the 2016 survey’s results are released.

Welfare, on the other hand, has not grown. In 1992, median welfare take stood at $2940. By 2013, it was $2,660.

Poor Young People Aren’t Major Social Assistance Recipients

America has a large welfare state, but it primarily serves the elderly. Social payments to the working age population and the poor are far less generous. Payments to the poor are low and have been shrinking, probably as a result of the political demonization of these programs.

In contrast, senior-targeted social programs have been generous. This generosity has been growing at a time when the government has been trying to cut other assistance programs.


  1. These analyses were aided by the excellent R resources made available by Anthony Damico