Tag: workforce skills gap

California is Still Golden for College Graduates

Over the past 15 years, 1.5 million more people have left California than have moved here from other states, according to estimates from the California Department of Finance. Remarkably, even in the face of this outflow, California still experiences net gains of college graduates (those with at least a bachelor’s degree). Over the past five years, California ranks second among all states in net gains of college graduates from other states, even as it ranks first in net losses of less educated adults.

From a demographic perspective, these patterns are unprecedented. In contrast to California, other states that gain large numbers of college graduates, such as Texas and Florida, also gain large numbers of less-educated residents. And states that lose large numbers of less-educated residents, such as New York and Illinois, also lose large numbers of college graduates. California is unique in gaining large numbers of college graduates while losing large numbers of less educated adults.

Why does California have such disparate migration patterns? People move across state lines for many reasons, but primary among them are jobs, housing, and family. California’s strong labor market for highly educated workers attracts college graduates from other states, while the state’s high cost of housing is especially hard on workers with less education and lower incomes.

California will face a large skills gap by 2030—it will be 1.1 million college educated workers short of economic demand if current trends in the demand for skilled workers and the educational attainment of the state’s population continue. Can migration fill this gap? No, but it can help. However, in 2015–16 the University of California awarded more than 50,000 bachelor’s degrees, the California State University awarded more than 90,000, and private non-profit colleges in California awarded almost 40,000—much more than the average annual migration gain of about 20,000 college graduates.

The best way to close the skills gap is to prepare more Californians for the economy of the future. The state can increase the number of home-grown college graduates by focusing on college readiness in K–12 schools, improving completion and transfer rates at all the state’s higher education institutions, and expanding access to four-year colleges. By taking action now, the state can realize big benefits in the future: higher incomes, more tax revenue, less demand for social services, and greater economic mobility.

Learn more

Read California’s Future: Higher Education
Visit the PPIC Higher Education Center

Highly Educated Workers See Strong Job Gains

Recessions and recoveries have the power to reshape our economy and workforce. In California, the latest recession and recovery have had very different consequences for workers based on their educational attainment levels. During the Great Recession, most job losses occurred among less educated workers, and the subsequent recovery has seen stronger gains for highly educated workers.

After declining to a nadir in 2010 with the Great Recession, the number of employed workers in California has grown substantially, increasing by 1.6 million among adults of prime working age (20 to 64) between 2010 and 2015, according to data from the American Community Survey. During the recovery, the rate of employment growth has been highest for workers with a bachelor’s degree or graduate degree (see chart). Even though high school graduates have also fared relatively well in the recovery, they suffered the most in the recession and recent gains have still not offset the job losses they sustained from 2007 to 2010.

These employment gains reflect the changing nature of our economy. Many of the fastest-growing occupations rely on highly educated workers, such as software developers, computer scientists, and management analysts. But other fast-growing occupations depend on less educated workers, such as taxi drivers and chauffeurs (including those that work for Lyft or Uber) and food preparation workers. Overall, occupations highly dependent on college graduates—those in which a majority of workers in 2010 had at least a bachelor’s degree—experienced a much faster rate of growth (14.1%) than occupations less dependent on college graduates (9.6%).

The changing nature of the state’s economy has also created regional winners and losers. The Bay Area, with its highly educated population, led the state in employment growth, adding more than 400,000 workers overall from 2010 to 2015, with college graduates making up 75% of those job gains (see chart). In contrast, the rate of employment growth was lowest in the San Joaquin Valley, where the demand for and supply of highly educated workers is relatively weak. In the Inland Empire and the San Joaquin Valley, college graduates accounted for only 20% and 17%, respectively, of employment gains.

California’s recovery from the Great Recession highlights the importance of the state’s higher education systems in providing meaningful economic opportunities for workers. Rather than being diminished by the most recent recession and recovery, a college education has emerged as an even more important determinant of labor market success.

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Visit the PPIC Higher Education Center

Immigrants Are Key to the State’s High-Skilled Workforce

Immigrants are integral to California’s highly skilled workforce. As California’s demand for highly educated workers has outpaced the supply produced by its colleges and universities, immigrants have filled the gap. Immigrants now make up a substantial share of the state’s highly educated workers. Today, three of every ten highly educated workers in California is an immigrant, up from one in five in 1990. Immigrants are especially important in the state’s high tech sector, comprising 52% of college graduates who work in computer systems design and services and 57% of those in computer equipment and peripheral manufacturing (findings based on the 2013‒2015 American Community Survey).

Over time, the face of immigration to California has changed. Recent immigrants are more highly educated than immigrants who arrived earlier. In the past, most immigrants arrived from Latin America. But in recent years, most new immigrants to California are from Asia. Because many immigrants from Asia are highly educated, this regional shift has contributed to a change in immigrants’ education levels. Immigrants who have arrived in California in the past five years are among the most highly educated demographic group in the state, with more than half (52%) holding at least a bachelor’s degree, compared to 35% of US-born Californians.

Immigrants to California from the seven countries that are the focus of President Trump’s executive order —Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen—also tend to be highly educated. According to the 2015 American Community Survey, California is home to 305,000 immigrants from these countries—35% of the total number of immigrants from these countries in the nation—with most (213,000) from Iran. Altogether, almost half (47%) of adult immigrants (ages 25‒64) from these countries have a bachelor’s or graduate degree, including 54% of those from Iran.

Given the contribution of highly educated immigrants to California’s economy, and especially to the state’s high tech sector, it is no wonder that many companies and state officials have raised concerns about the president’s executive order.

PPIC has projected that California faces a workforce skills gap and needs to increase the number of adults with a bachelor’s degree by an additional 1.1 million to meet workplace demands by 2030. These projections assume that the state will continue to attract substantial numbers of highly educated immigrants from abroad. Restrictions on the flow of those immigrants could exacerbate the projected workforce skills gap—and cause significant damage to the state’s economy.

Learn more

Visit the PPIC Higher Education Center

Testimony: Closing California’s Workforce Skills Gap

Hans Johnson, director of the PPIC Higher Education Center and PPIC senior fellow, testified before the Assembly Budget Subcommittee Number 2 on Education Finance in Sacramento yesterday (May 17, 2016). Here are his prepared remarks.

The Public Policy Institute of California (PPIC) projects that between now and 2030 California will fall 1.1 million bachelor’s degrees short of workforce demand.1 Closing this gap will require substantial improvements in access to four-year colleges, transfer rates from community colleges, and completion rates among students who enroll in college. In this testimony, PPIC identifies specific goals for access, transfer, and completion at California’s public colleges and universities, and increases in private colleges that together could close the workforce skills gap.

Our work on this issue emphasizes that closing the workforce skills gap will require strong improvements in college enrollment and completion among underrepresented groups, including low-income students, first-generation college students, Latinos, and African Americans. California cannot succeed economically unless gaps in educational attainment are eliminated or at least substantially reduced. A forthcoming report from PPIC will show how new goals for access, completion, and transfer will improve equity in California.

In our baseline scenario, which is based on current practices and procedures, California’s public and private higher education institutions will produce 3.1 million bachelor’s degrees between 2015–16 and 2029–30. This baseline scenario assumes that the state’s college enrollment rates, completion rates, and transfer rates will remain at current levels.

Our “closing-the-gap” scenario charts a course to producing 4.2 million bachelor’s degrees over the next 15 years. In this scenario, the total number of bachelor’s degrees awarded in 2029–30 would be 60 percent higher than in the baseline scenario—and it would be 72 percent higher than the number of degrees awarded in 2014–15. Such dramatic increases are not entirely without precedent. Between 2002–03 and 2014–15, the annual number of bachelor’s degrees awarded by California’s public and private universities increased almost 50 percent. Gains in earlier periods were even more impressive. For example, between 1964–65 and 1979–80 the number of bachelor’s degrees awarded at CSU increased 95 percent.

In the recent past, growth in the number of bachelor’s degrees awarded at UC and CSU was fueled primarily by increases in the number of students who enrolled in college and secondarily by increases in completion rates. Even though the share of high school graduates entering UC and CSU did not change appreciably, enrollment increased as the number of high school graduates grew.

The California Department of Finance projects that the number of high school graduates will not change substantially over the next fifteen years. This means that increasing the number of bachelor’s degrees awarded will require changes in three key thresholds in the education pipeline from high school to college to degree.

  • First, the share of recent high school graduates eligible for and enrolling in four-year colleges will need to increase.
  • Second, persistence and completion rates for students enrolled in college must increase.
  • Third, the number of students who transfer from community colleges to four-year colleges (or return to college) must increase.

The exact mix of improvements in these three areas is not set in stone. Our closing-the-gap scenario is based on empirical trends, and our current focus is on public institutions. We assume that private colleges will keep pace with those in the public sector, continuing to produce about a third of all bachelor’s degrees awarded each year. Also, we have not incorporated applied bachelor’s degrees awarded by the state’s community colleges, as those numbers are still very small. This means that UC and CSU together would need to produce an additional 730,000 bachelor’s degrees over this period and private colleges would need to produce an additional 340,000 bachelor’s degrees (a total of 1.1 million) to fully close the degree gap by 2030. Private nonprofit colleges would account for the vast majority of the additional degrees awarded by the private sector.

Our initial closing-the-gap scenario sets the following targets for the state’s public colleges and universities:

  • Eligibility will increase 5 percentage points over current levels at UC (the top 17.5 percent of high school graduates will be eligible for UC, up from the 12.5 percent share set by California’s Master Plan for Higher Education) and 6.7 percentage points at CSU (the top 40 percent will be eligible for CSU, up from the top third). These new eligibility levels will be phased in over an eight-year period.
  • The number of transfer students will increase 35 percent over baseline levels. These increases will be phased in over a five-year period.
  • Completion rates will increase 9 percentage points at UC and 17 percentage points at CSU. At UC, completion rates for students who enroll as freshmen will increase incrementally from 83 percent in 2016 to 92 percent by 2026. Completion rates for freshmen at CSU will increase incrementally from 57 percent in 2016 to 74 percent by 2030. There will be similar increases in completion rates for transfer students at both institutions.

CSU will account for most of the increase in degrees awarded over the entire projection period—it will award 481,000 additional degrees, compared to UC’s increase of 251,000. This is both because CSU is a larger institution, enrolling many more students than UC, and because CSU has much more room for improvement in graduation rates. Private nonprofit colleges would also play an important role, adding an additional 206,000 degrees. Other additional sources, such as private for-profit colleges, online degree programs, and bachelor’s degrees awarded by community colleges, will also need to play a role (see Table 1).

Most of the projected increase in degrees awarded at CSU comes from improvements in completion, while increased eligibility accounts for almost half of UC’s increase. Increased transfer rates will also be necessary to close the gap (see Table 2).

Of course, this is just one scenario for closing the workforce skills gap (our interactive model is available upon request). In the future, we expect to develop alternative closing-the-gap scenarios; we will also examine the potential impact of shortening the time it takes students to get their degrees. Additional work should assess the role that private institutions might play. Other scenarios might involve different assumptions and targets. But, however it is accomplished, closing the gap will lead to better economic outcomes for all Californians, increased state revenues, and reduced social service demands.

1. Hans Johnson, Marisol Cuellar Mejia, and Sarah Bohn, Will California Run Out of College Graduates? (PPIC, 2015).
Figure note (middle): “Other” includes online degrees, private for-profit degrees, and applied bachelor’s degrees awarded by the community colleges.
Photo credit: Public Affairs/Sacramento State