Higher Education

As knowledge becomes more central to economic activity in both developed and developing economies, large segments of the population complete some form of higher education. Government programs designed to advance the development of a knowledge-intensive economy bolster private incentives to obtain knowledge and skills that may lead to better, higher-paying jobs. Lifelong learning, including acquisition of additional formal education, becomes both more possible and more necessary even for people with significant workforce experience.

Educational credentials are only an approximate indicator of useful labor force skills. They do not register quality differences, skills acquired through job experiences or informal learning, or skills decay brought on by the progress of knowledge and economic change. In addition, workers may take advantage of publicly supported educational opportunities to gain labor market advantages, but may not use the additional skills at work, while employers may hire readily available workers without using their most advanced skills.

Human capital development responds to incentives of the knowledge-intensive economy.

In international comparison, the United States has a larger proportion of the working-age population with a higher education degree (39%) than most other countries (figure O-45figure.). Only the Russian Federation (55%), Israel (45%), and Canada (45%) have higher percentages for this indicator.

More recent age cohorts obtain higher postsecondary degree rates than earlier ones.

In almost all countries, higher education is more common in the younger cohorts entering the workforce than in older cohorts, mirroring the trend toward knowledge-intensive economies. For OECD member countries, the average difference between the youngest cohort with generally completed formal schooling and the working-age population as a whole is about 6 percentage points; in several nations the difference is more than 10 percentage points. Differences are especially large for South Korea and Japan, the two Asian OECD members, but some European countries (France, Ireland, Spain, and Belgium) also recorded substantial differences.

The United States and Germany are exceptions to the overall OECD pattern: in these two countries there is no substantial difference between the 25–34-year-olds and the working-age population as a whole. These age patterns in educational attainment suggest that, in the future, other developed countries will more closely resemble the United States in the availability of workers with postsecondary credentials (figure O-46figure.).

Substantial advanced training prepares the U.S. workforce for high-skill work.

The proportion of 25–64-year-olds with advanced[8] education, as evidenced by a bachelor's degree or beyond, is an indicator of the workforce that is equipped to develop and apply knowledge in innovative ways. In the United States, a substantially higher proportion than in other large, developed economies has completed such a course of study, although a few smaller countries have proportions that match or nearly match the U.S. percentage (figure O-47figure.). Such additional training can prepare students for high-skill work and more advanced training in research.

Throughout the developed world, the proportion of the population in the youngest working cohort with education at or beyond the bachelor's level is higher than for the working-age population as a whole. Again, however, this difference is smaller in the United States and Germany than in any of the other countries for which data are available. As younger cohorts of workers enter the labor forces in the future, the U.S. lead on this indicator can be expected to shrink. Nonetheless, the United States ranks behind only a few small countries—Norway, Israel, the Netherlands, and South Korea—in the proportion of the cohort that is entering the labor force that receives this kind of education (figure O-48figure.).

Advanced training in natural sciences and engineering is becoming widespread, eroding the U.S. advantage.

The number of first university degrees a nation awards in natural sciences and engineering (NS&E) is a workforce indicator that is more specifically focused on a nation's capacity to innovate in S&T. Because of its population size, the United States has seen much larger numerical increases in first university NS&E degrees than other countries. China is an exception. It has experienced a huge recent increase in NS&E degree recipients, although there are questions about the quality of some of its graduates. The rising number of Chinese-trained engineers is similarly striking, especially in contrast with declining numbers of U.S. engineering graduates (figure O-49figure.).

Many countries have also increased the numbers of individuals they train in NS&E at the doctoral level over the past 20 years (figure O-50figure.). Most of the U.S. growth occurred during the first half of this period, when the number of doctorates awarded by U.S. institutions increased steadily; although the number peaked in 2005, this was the first year in which it exceeded the 1997 total. However, virtually all of the recent U.S. growth reflected rising proportions of degrees to non-U.S. citizens: more than half in engineering and computer science and nearly 45% in the physical sciences. In contrast, China's growth was most marked after 1993 and its growth rates after 2000 were especially high. Over the course of the entire period, China surpassed numerous other countries in doctorate production, and the U.S.-China difference is narrowing.

High-skilled knowledge workers are increasingly internationally mobile, and many come to the United States for training or work.

Knowledge workers are increasingly mobile across national boundaries, especially at the doctoral level. As is the case in the United States, in highly developed countries many S&E doctoral degrees are awarded to foreign students, often from the developing world (figure O-51figure.). Experienced in adapting to life in a different culture and equipped with flexible skills, these workers are well positioned to compete in a global market for knowledge workers.

In the United States, increasing proportions of S&E workers are foreign born and/or foreign educated, a fact that has been interpreted from a variety of perspectives. Some observers stress strengths of the U.S. economy that pull in foreign workers, including the attractiveness of living in the United States and the favorable opportunities for high incomes and career advancement in the S&E workforce. Other observers express concern about the inability of U.S. society to prepare and interest young Americans in the S&E jobs that the economy makes available (see section on U.S. K–12 education).

According to census data, the number of foreign-born workers in the U.S. S&E workforce more than quadrupled between 1980 and 2000, with most of the increase taking place in the 1990s. As a result, the percentage of foreign-born workers in the U.S. S&E workforce increased from nearly 10% in 1980 to 12% in 1990 and 18% in 2000.

Increases occurred among S&E workers at all educational levels but were especially pronounced among the more highly educated (figure O-52figure.). Thus, the proportion of foreign-born doctorate-level workers rose from 24% in 1990 to 38% in 2000, and the corresponding figures for master's-level workers were 19% and 29%. Census data for 2005 shown in figure O-52, although not fully comparable to the earlier data, suggest that the percentage of foreign-born workers is continuing to increase. In addition, a growing proportion of S&E doctoral faculty, who are not included in the census data counts, are also foreign born. Their proportion increased from 21% in 1992 to 28% in 2003.

High-skill-related visa issuances have increased to, or beyond, their pre-9/11 record.

The 2001 terrorist attacks, subsequent government responses, and reactions abroad combined to depress previously rising visa issuances for foreign students, exchange visitors, and other high-skill-related visa categories (figure O-53figure.). Student visas in particular dropped by 25% in the immediately succeeding years, a decline that prompted concern about the long-term impact on the United States' ability to attract the best foreign talent.

The latest data show an upswing in high-skill-related visas issued, starting in 2004 and carrying into 2006, with record numbers of temporary high-skill-related visas issued. The number of student and exchange-visitor visas issued in 2006 was higher than ever before, and the sum of the other high-skill-related visa categories was near the 2001 high, suggesting a continuing attractiveness of the United States to those with advanced education.


[8] "Advanced" degrees are defined as International Standard Classification of Education Degrees, tertiary-type A and advanced research programs only.

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