Get an Education and Double Your Salary (A two-part series)

PART 1 – From High School Graduation to Higher Earnings

Contact: Andy Lewis, 608-263-1432, ablewis@facstaff.wisc.edu

You could earn as much as a million dollars more in income over a 30-year career if you have a bachelor's degree, as compared with a high-school dropout, according to a U.S. Census-based report by the Center for Community Economic Development at University of Wisconsin-Extension. There is a widening gap between the earnings of those who have a college education and those who do not.

While this may be good news for college-bound students and college graduates, the gap also provides a critical opportunity for Wisconsin communities to explore the economic impact of educational attainment, says Andy Lewis, UW-Extension Community Development Specialist.

Wisconsin historically has relied heavily on manufacturing jobs, which have paid high wages without requiring a high level of education. The Center on Wisconsin Strategy reports that the state lost 54,000 manufacturing jobs between 2001 and 2003, a 9.5 percent decrease. The loss of these jobs, along with a “brain drain” of college educated young people leaving the state, raises many questions about the future of Wisconsin’s economy.

“There is probably no better predictor of income than educational attainment,” says Lewis.

Although some significant differences exist when you look at the data by race and/or gender, the U.S. Census Bureau reports that the average annual income for a person with a bachelor's degree in 1999 was $48,378 compared with the average income of $24,030 for a high school graduate. A high-school dropout earns just 49 percent of what an average adult worker earns each year.

“When calculated over a career of 30 years, a person with a bachelor’s degree earns one million more than the high-school dropout,” Lewis says. “Simply earning a high school degree means an additional $252,000 over that same 30 years.”

When you take inflation into consideration, the earnings gap is widening. In 1981, the difference in annual earnings between a high school graduate and someone with a bachelors’ degree was $13,718. Twenty years later, that gap has grown to $24,150 (as expressed in 2001 dollars).

How do the educational attainment levels in Wisconsin compare to the nation?

“Overall, high school graduation rates are quite high in Wisconsin,” says Lewis. One study ranks Wisconsin third in the nation behind only Iowa and North Dakota. However, these averages mask real problems. While Wisconsin ranks high for the population as a whole, the state ranked last in terms of graduating African American students. (Only 39 states track these rates and Wisconsin ranked 39th.) African Americans in Wisconsin have a graduation rate of 40 percent compared with a graduation rate for whites of 92 percent.

“Given the level of interest in the ‘brain drain’ at the community level,” Lewis says, “it could provide insight to compare graduation rates in a school district to the educational attainment of the adult population within that school district.” Census data on educational attainment is reported at the school district level and illustrates some interesting contrasts.

The Granton Area High School, for example, reports graduation rates of 100 percent for the class of 2001-02, and yet only 63 percent of the adult population (age 25 and over) has a high school diploma or higher level of education. The Menominee Indian High School district, Milwaukee Public Schools, and the Madison Metropolitan School District on the other hand, have adult populations with a higher percentage that graduated from high school than the class of 2001-02 in those districts.

[NOTE: To create bar charts illustrating the municipalities you are interested in, download the Excel Worksheet at: http://www.uwex.edu/ces/cced/documents/edattainment25.xls]

High schools such as Racine, Webster, Lakeland and Whitefish Bay had graduation rates that were nearly identical for the adult population and the current graduating class. As might be expected, almost all of the other school districts had a current graduation rate that was higher than the general population in the district. This reflects the increased emphasis on obtaining a high school diploma, but may also reflect the loss of high school graduates from the community.

What about the plans of graduates upon finishing high school?

The Wisconsin Department of Public Instruction maintains a web site known as Wisconsin's Information Network for Successful Schools (WINSS) that provides communities with useful data on post graduation plans. In the “academic performance” section of the web site, users can view survey data on the post-graduation plans of seniors for each Wisconsin school.

A quick analysis of this data reveals dramatic differences between school districts. For example, at Beloit Memorial High School, only 3.1 percent of seniors planned on attending a university (61 percent were “undecided”). At Milwaukee King, Nicolet, and Whitefish Bay High Schools, more than 80 percent of seniors planned to attend a college following graduation. On average, 48 percent of Wisconsin seniors indicated an intention to attend a university.

The same kinds of variations are seen in plans to attend a vocational/technical college to pursue an Associate degree. While on average, about 22 percent of seniors said they intend to go to vocational technical school, over 50 percent of seniors at Pulaski, Benton, Seneca, Flambeau, Weston, Winter, and other high schools had such plans. In many schools, fewer than 10 percent of seniors plan to pursue an associate degree (Pecatonica, Eau Claire Memorial, Shorewood, and Central High in Waukesha County).

[NOTE: To insert post-graduation plans data for specific school districts in your area, download the Microsoft Excel Worksheet located at: http://www.uwex.edu/ces/cced/documents/ED_postgrplans02.xls]

“While high school counselors follow the path graduates take to college or other post-high school education,” Lewis says, “the trail ends there. Communities could do a better job of keeping track of former graduates, as no state agency consistently collects this data.“

A study titled, “Where the High School Graduates Go” was conducted by UW-Extension in 1995 to examine what happens to Wisconsin’s high school graduates. This study compared the 1984 class reunion lists of eight Wisconsin high schools with current address lists of graduates a decade later in 1994. The study concluded that half (44.6 percent) of all of the graduates had moved to a community more then 25 miles from the high school they attended. This percentage ranged from 33 percent to 64 percent for the classes, which ranged in size from 53 to 315.

These study results may prompt Wisconsin communities to develop strategies to address several questions, including:

-- The need for career and financial counseling for people who drop out of high school.

-- What strategies could be employed to attract former residents who have moved away? When high paying jobs requiring college graduates are created or pursued, is there anyone more familiar with the community than former high school grads?

-- How could economic development organizations work with the educational systems to track high school graduates once they have left the community?

Get an Education and Double Your Salary (A two-part series)

PART 2 – Generating Graduates and the Jobs to Keep Them

Contact: Andy Lewis, 608-263-1432, ablewis@facstaff.wisc.edu

One of the benchmarks for measuring the state’s economic progress has been the percentage of the adult population with a college degree. And yet, Wisconsin ranks below the national average for residents with bachelor’s degree or higher education, according to a U.S. Census-based report by the Center for Community Economic Development at University of Wisconsin-Extension.

The out-migration of college graduates, commonly referred to as the “brain drain,” is critical to Wisconsin’s economic future, in part because of the absence of enough high-paying jobs to keep the graduates here, says Andy Lewis, UW-Extension Community Development Specialist. There is a growing consensus among experts that the state's brain drain is a symptom of an economy moving too slowly from the industrial to the knowledge base needed to produce enough jobs for college graduates.

“Equally important is the number of college-educated people moving in and out of the state,” says Lewis. According to a study by an Iowa consulting firm, Postsecondary Education Opportunity (PEO), 269,647 bachelor's degrees were granted by Wisconsin colleges and universities between 1989 and 1999. During the same period, the number of people 25 or older in the state with college degrees grew to 790,600 from 571,725. That gain of educated people is 50,772 fewer than the number of bachelor's degrees granted by state colleges and universities during the period (See Chart 1). Net migration of college grads out of the state over this ten-year period of time was equal to about 1.5 percent of the population in Wisconsin that was 25 years of age or older (1999).

Chart 1

NET MIGRATION OF COLLEGE GRADUATES
	Estimated Number of Persons Over 25 Years Old with a Bachelor's Degree		Estimated Change in Bachelor's Degree Stock	Number of Bachelor's Degrees Produced	Estimated Net Brain Drain or Net Gain
	1989	1999	1989-1999	1989-1999	1989-1999
Minnesota	577,920	953,920	376,000	234,945	141,055
Illinois	1,490,293	1,939,200	448,907	513,754	-64,847
Iowa	305,406	393,638	88,232	173,537	-85,305
North Dakota	89,244	89,200	-44	45,022	-46,066
South Dakota	79,672	110,848	31,176	40,669	-9,493
Wisconsin	571,725	790,600	218,875	269,647	-50,772
Sources: Postsecondary Education Opportunity http://www.postsecondary.org/archives/Reports/Spreadsheets/StockFlow.htm (Data on all states)

“Call that the real brain drain,” says Lewis. “Only 13 states saw a larger absolute loss during that time.”

The encouraging news is that this same organization reports progress in the state of Wisconsin. When analyzing recently released data (not yet published on the PEO web site) for the year 2001, the net loss of college graduates in Wisconsin had dropped to -32,702 for the period of 1989-2001. This was an improvement of +18,070 in just two years.

The evidence for out-migration in Wisconsin does seem to be clear for college graduates. In a study conducted by the Indiana Fiscal Policy Institute, Wisconsin ranked below the national average and ranked only ahead of Indiana in the percentage of students that continue to reside in the state following graduation.

In terms of post-secondary education, the U.S. Census Bureau reports that a person with a bachelor’s degree can expect to earn $2.1 million over the course of a career. That earning power increases to $2.5 million for people with a master’s degree, nearly double the expected earnings of an average high school graduate.

According to the 2000 Census, about a quarter (22.4 percent) of Wisconsin residents over the age of 25 have a bachelors degree or higher. Wisconsin ranks 30th on this measure and is not doing a particularly good job of retaining or attracting people with this level of education. The national average for this indicator is 24.4 percent.

In addition, some significant differences exist between counties in Wisconsin. The percentage of adults (age 25 or older) who have a bachelor’s degree or higher ranges from 41 percent in Dane County to 9.97 percent in Juneau and Adams County.

At the municipal level, the range of educational attainment is even wider. The percentage of people 25 years and older with a bachelors degree or higher ranges from a high of 82 percent in the Village of Shorewood Hills in Dane County to a low of one percent in the Village of Oakdale in Monroe County.

[NOTE: To create a bar chart illustrating the municipalities you are interested in, download the Excel Worksheet: http://www.uwex.edu/ces/cced/documents/edattain_all_WI_places.xls. Next, click on the red tab, click on the button titled “Wisconsin Place”, and select the places you are interested in.]

According to the American College Testing Program, the completion rate for four-year colleges (completion of a bachelor’s degree in five years or less) was only 51 percent in 2002. The completion rate for two-year colleges (completion of an associate’s degree in three years or less) was only 36 percent in 2001 (Data was not yet available for 2002). The completion rate for two-year colleges and four-year colleges were both at an all time low in 2001. The national dropout rates for all types of institutions between the freshman and sophomore year was 33 percent in 2003. What happens to these students?

A Wisconsin Department of Public Instruction survey indicates that 48 percent of the 60,575 Wisconsin seniors in 2002 planned on attending a university, while 21.6 percent indicated an interest in attending a vocational/technical school.

“If all of those students followed through on their intentions,” says Lewis, “and mirrored the dropout rates for the nation, there would be about 9,682 Wisconsin adults leaving a university setting between their freshman and sophomore years with an additional 4,357 leaving vocational/technical schools.”

These findings may prompt Wisconsin communities to develop strategies to address several questions, including:

-- Do community colleges attempt to recruit students who may have dropped out of a four-year college?

-- Does anyone provide career and financial counseling to people who drop out of school?

-- When high paying jobs requiring college graduates are created or pursued, what strategies could be employed to attract former residents that have moved away? After all, is anyone more familiar with the community than former residents?

-- What economic development strategies could be applied to create more jobs in Wisconsin that require more education (and higher incomes), with the understanding that the brain drain is driven by both the supply side (generating graduates) and the demand side (high paying jobs).

-- What training will be required for people who have lost their manufacturing jobs and now find themselves in a market where a similar wage requires higher educational attainment?