Intent of 40/40/20

The Education Imperative

The Circle of Prosperity A talented, flexible workforce and an appealing environment… Diverse, value-adding industries that provide well paying jobs… Generate revenues for excellent schools, quality public services, and public facilities The Circle of Prosperity

Three Eras of US Education

1915-1940 Mass secondary school education begins to drive college enrollments

Universal high schools drive postsecondary enrollments Elementary Secondary Universal high schools drive postsecondary enrollments Elementary and secondary enrollments (public institutions), postsecondary enrollment (public and private); Source: NCES (1993), 120 Years of American Education: A Statistical Portrait. Tables 8 and 24.

1915-1940 Supply of Skilled Workers Exceeds Demand Supply and Demand for US College Educated Workers: 1915-2005; Source: Goldin and Katz (May 2009) The Race between Education and Technology, Chapter 8 excerpt. Table 1

College wage premium falls during 1915-1940 Source: Goldin and Katz (May 2009) The Race between Education and Technology. Chapter 8 excerpt, Figure 3

1940-1980 Postsecondary expansion fed by higher rates of high school completion

1940-1980 Growing rates of HS and college grads HS Completers BA+ 1940-1980 Growing rates of HS and college grads US Educational Attainment, 25-29 year olds, 1940-2010, Source: US Census Bureau

Oregon and US among world leaders in educational attainment Percentage of 55- to 64-Year-Olds with an Associate Degree or Higher, 2007; Source: OECD

1940-1980 An oversupply of skills then a match Demand Supply 1940-1980 An oversupply of skills then a match Supply and Demand for US College Educated Workers: 1915-2005; Source: Goldin and Katz (May 2009) The Race between Education and Technology, Chapter 8 excerpt. Table 1

1940-1980 College Wage Premium: 30-45% Source: Goldin and Katz (May 2009) The Race between Education and Technology. Chapter 8 excerpt, Figure 3

Masters+ BAs AA and some college HS degree No HS degree 1940-1980 Wages grew rapidly and together Average Portland Wages (2010 dollars) by Educational Attainment, Laborforce Participants Ages 25-64

1980-2005 High school graduation rates plateau and college degrees slow

Growth in attainment slows Self-reported completion is overstated. HS Completers BA+ Growth in attainment slows Educational Attainment, 25-29 year olds, 1940-2010; Source: US Census

1980-2005 Demand for skills exceeds supply Supply and Demand for US College Educated Workers: 1915-2005; Source: Goldin and Katz (May 2009) The Race between Education and Technology, Chapter 8 excerpt. Table 1

US and Oregon fall off the international pace Percentage of 25- to 34-Year-olds with an Associate Degree or Higher, 2007; Source: OECD

College wage premium soars Source: Goldin and Katz (May 2009) The Race between Education and Technology. Chapter 8 excerpt, Figure 3

Masters+ Bachelor’s degree AA and some college HS degree No HS degree High school grads and dropouts see declines in real wages Average Portland Wages (2010 dollars) by Educational Attainment, Laborforce Participants Ages 25-64

“A big reversal occurred around 1980 “A big reversal occurred around 1980.…Education lost the race to technology….the slowdown in education at various levels is robbing Americans of the ability to grow strong together.” Goldin and Katz (2009)

Clarifying the Goal

How does the goal apply to the stock and flow of working-age Oregonians? The Flow = 55,000 Oregonians will turn 25 each year The Stock = 2,400,000 working age adults

40/40/20 for all Working-Age Adults BA+ 40% AA or Credential High School 20% 40/40/20 for all Working-Age Adults

40/40/20 Focused on the Pipeline BA+ 40% AA or Credential High School 20% BA+ 30% BA+ 33% AA or Credential 18% AA or Credential 24% High School 42% High School 36% Less than HS 10% Less than HS 7% 40/40/20 Focused on the Pipeline

Which credentials count toward 40/40/20? And does the system prioritize certain skills or degrees (e.g., STEM)?

The Payoff

Educational Attainment Drives Personal Income Share of population with college degree and personal income per capita, 2010 Source: US Census

Economic Return of Higher Educational Attainment +11% Increase in long-run state earnings +$ 16.1 billion Annual increase in personal income $37,909 $42,079 Change in annual per capita personal income