Written by Malak Kalasho
From individual higher earning potential and better job security to overall higher levels of economic growth and social development, the benefits of higher education are endless for both individual college graduates and society at large. For decades, the U.S. economy and American society have benefited from increased levels of educational attainment; however, recent trends in student enrollment have raised concern over the future costs of declining enrollment rates.
Colleges and universities have experienced a gradual decline in undergraduate student enrollment over the past decade but have recently seen a sharper decline as a result of the coronavirus pandemic. From the fall of 2019 to the fall of 2020, nationwide undergraduate enrollment declined by over 560,000 students, or about 3.6% (Nadworny, 2022). The figure below displays the trend of declining undergraduate student enrollment since 2015, with a slightly sharper decline occurring in 2020 due to the pandemic.
Many colleges and universities assumed that several 2020 high school graduates were taking a “pandemic gap year” and predicted that the decline in enrollment in 2020 would be followed by an increase in 2021 (Nadworny, 2022). Recent data, however, has shown that this has not been the case. Among students who graduated high school in 2020 and did not enroll in college that same year, only 2% enrolled in the following year. As a result, college enrollment continued to decline by another 3.1% from 2020 to 2021. This decline in undergraduate enrollment could have significant consequences on the future of the U.S. economy.
High school graduates who do not enroll in college have generally lower earnings and higher rates of unemployment than those with undergraduate degrees. A recent Georgetown University study found that the median lifetime earnings of an individual with only a high school diploma or GED are about $1.6 million, in comparison to $2 million for those with an associate’s degree and $2.8 million for those with a bachelor’s degree (Carnevale et al., 2021). This positive association between education and median earnings occurs with every additional level of education, as shown in the following figure.
Furthermore, high school graduates without undergraduate degrees have a 9% unemployment rate, in contrast to 7.1% for those with associate’s degrees and 5.5% for those with bachelor’s degrees (Torpey, 2021). As a result, they also pay about 45% less in taxes than those with bachelor’s degrees while also requiring more government-funded social services (Marcus, 2022). Some of these services may include Medicaid, food stamps, public housing, and unemployment benefits. This means that more individuals could require social services in an economy that is generating less tax revenue. Simultaneously, economic growth could also decline due to a decrease in consumer spending caused by a decrease in average earnings.
Poverty rates also tend to be higher among those without college degrees. Recent data shows that poverty rates decrease with higher levels of education across all household types. In fact, 13% of individuals aged 25 and older with only high school diplomas lived in poverty in 2018, in contrast to 7% among associate degree holders and 4% for those with at least a bachelor’s degree (Ma et al., 2019). This data is shown in the figure below, which displays levels of poverty across all levels of education and type of household in 2018.
The cost of not enrolling in college also extends beyond monetary and economic consequences. The nationwide decline in undergraduate student enrollment could also have several negative impacts on the future of American society. According to a recent report by the College Board, higher levels of education are associated with healthier lifestyles. In 2018, trends in education levels and physical activity showed that 47% of those with only high school diplomas reported to engaging in vigorous exercise at least once a week, in contrast to 57% for those with associate’s degrees and 69% for bachelor’s degree holders (Ma et al., 2019).
There is also a significant association between levels of education and a healthy lifestyle in relation to smoking rates. Since the 1960s, when the U.S. Surgeon General released the first report on smoking and health, smoking rates declined among all individuals; however, this decline was much greater among those with bachelor’s degrees (Ma et al., 2019). The figure below displays smoking rates across education levels from 1940 to 2017. Controlling for the increase that occurs from 1940 to the 1960s due to a lack of information on the dangers of smoking prior to the release of the report in 1964, it is clear that those with bachelor’s degrees have much lower rates of smoking than those without a college education.
The report also shows that higher levels of education are associated with higher levels of civic involvement. In 2017, 37% of bachelor’s degree holders and 28% of associate’s degree holders reported to volunteering throughout the year, while 16% of those with only high school diplomas reported to volunteering (Ma et al., 2019). These trends are also present in voter turnout. In 2018, voting rates among Americans increased with education across every age group. In fact, 32% more U.S. citizens with at least a bachelor’s degree voted than those with only high school diplomas.
Given the declining rates in college enrollment across the country, it is likely that the future U.S. economy may see lower overall median earnings, higher levels of unemployment, less tax revenue, and higher rates of poverty. In addition to the future economic costs, American society may also incur the costs of the decline as it may experience lower levels of overall physical health, less civic engagement, and lower voter turnout.
References
Carnevale, P, Cheah, B., & Wenzinger, E. (2021). The College Payoff. Georgetown University Center on Education and the Workforce. https://1gyhoq479ufd3yna29x7ubjn-wpengine.netdna-ssl.com/wp-content/uploads/cew-college_payoff_2021-fr.pdf
Ma, J., Pender, M., & Welch, M. (2019). Education Pays 2019: The Benefits of Higher Education for Individuals and Society. College Board. https://research.collegeboard.org/media/pdf/education-pays-2019-full-report.pdf
Marcus, J. (2022, January 22). Drop in college enrollment threatens to cause long-term economic, social consequences. The Washington Post. Retrieved March 20, 2022, from https://www.washingtonpost.com/education/2022/01/22/college-enrollment-drop/
Nadworny, E. (2022, January 13). Americans choose jobs over college. NPR. https://www.npr.org/2022/01/13/1072529477/more-than-1-million-fewer-students-are-in-college-the-lowest-enrollment-numbers-
Torpey, E. (2021, June). Education pays, 2020. U.S. Bureau of Labor Statistics. https://www.bls.gov/careeroutlook/2021/data-on-display/education-pays.htm