We Need a Supply-Side Education Policy

Wednesday night, Kamala Harris announced in a speech in Pennsylvania that, if elected, she would “eliminate degree requirements” for hundreds of thousands of federal jobs. And he added that he would call on “the private sector to make a similar commitment.”

This policy, often referred to as “skills-based hiring,” is hugely popular with voters, which explains why Harris made a similar promise earlier this month. The Trump administration also sought to loosen degree requirements for federal hiring through an executive order, making it a rare policy with bipartisan support. (This executive order, issued just before the 2020 election, doesn’t seem to have done much.) Almost 60 percent of adults ages 25 to 29 do not have a bachelor’s degree. If they have the skills to do a particular job, why should they be denied that chance just because they don’t have an arbitrary credential on paper?

And yet, despite its popularity, skills-based hiring is a dead-end policy. If every employer in America officially stopped requiring a four-year college degree for all available positions starting tomorrow, not much would change. In fact, Walmart, Apple and others They proudly touted the removal of the degree requirement in job postings, but the net impact on hiring was minimal. A recent Harvard Business School study to create When companies eliminate degree requirements, the share of hires with a bachelor’s degree drops by just two percentage points. Employers may not insist on a college degree, but they still prefer it.

So even if a degree isn’t formally required, candidates who have a degree will often outshine candidates who don’t because employers need a way to distinguish them from each other. In other words, the real problem is not the existence of a diploma requirement, but the lack of alternative ways for workers to prove their qualifications. If political leaders truly want to expand opportunities for Americans without a college education, this is the problem they must solve. It’s not particularly complicated to do this; but it will require the government to take a very different approach to higher education than it is accustomed to.

Removal proposal Degree requirements fit into a broader historical pattern of higher education and workforce development policy, particularly within the Democratic Party. Both the Obama and Biden administrations increased Pell Grant generosity to low-income students, forgave some student loans, and increased transparency in reporting college graduates’ outcomes. The Bipartisan Workforce Pell Act introduced by Congress would expand students’ ability to receive federal financial aid for non-degree programs. These are all demand-side policies; that is, they try to change incentives through prices, subsidies, and regulations.

Kevin Carey: The problem with ‘in demand’ jobs

what we’re missing supply side Career and technical education policy. USA spends business training is a paltry 0.03 percent of GDP, compared to an average of 0.11 percent in other developed economies. The absence of reliable non-degree pathways leads to a lack of interest in skilled jobs among young people, leading to shortages in essential occupations. like plumbing. Adjusting the knobs on the demand side dials won’t work because what we really need doesn’t exist yet.

Why do employers hire college graduates for entry-level jobs in the first place? New graduates often don’t have much practical knowledge, but being accepted to university and completing a four-year program of study signals that a graduate has at least some talent and grit. This helps explain why the college wage premium starts small and rises rapidly as workers gain experience. Companies hire untested college graduates in the hope that their investment will pay off over time.

Most employers prefer an employee who can be productive right away, which explains the theoretical appeal of skills-based hiring. The problem is that skills are difficult to verify. Companies know their employees’ talents, but they have no incentive to share that information with competitors who will use it to steal good employees. (Harvard economist Amanda Pallais shown (Entry-level workers benefit from information about their skills being publicly shared with the labor market.) Undergraduate qualifications unfortunately do not send a very clear signal either, because they are so diverse and present employers with a confusing array of options. Solving this problem would expand opportunities for Americans without a college degree much more than eliminating degree requirements.

To give just one example, consider providing a qualification for cardiovascular technicians. For example, at Bunker Hill Community College in Boston, you can enroll in a full-time, two-year program to earn your associate’s degree in cardiac sonography. At Hudson Valley Community College in Troy, New York, you can earn a one-year certificate in cardiac sonography; but you can do this only after completing an associate’s degree in another health-related field or a bachelor’s degree in an unrelated discipline. Meanwhile, many other community colleges in both states don’t even offer specific cardiovascular technology programs, opting instead to offer general “allied health” degrees and leaving specific training to employers.

The difference between universities means employers don’t know what they’re getting. A cardiovascular technician with HVCC certification can find employment in Troy, where local employers recognize his qualifications. But if he wants to get a better job at a hospital in Boston, he has no way of proving that his certification is worth anything. This limits his mobility and therefore his career opportunities: changing employers is a very important part of increasing wages. A big advantage of a bachelor’s degree is that you can take it anywhere.

David Deming: University backlash goes too far

Vice President Harris spoken Expansion of apprenticeship programs that combine paid on-the-job training with classroom training is welcome. Apprenticeship study – a careful evaluation of a federally funded registered apprenticeship program to create He said they provide significant earnings gains, but they are custom designed and expensive. More than 25,000 active programs served an average of fewer than 10 apprentices each in 2021, the most recent year for which data is available.

A more scalable model is FastForward ProgramFunding career-focused education for approximately 45,000 students at 23 colleges in Virginia. As part of the program, the state community-college system was created career maps With a common curriculum in fields such as manufacturing and health sciences that allows people to achieve advanced credentials that build or “stack” on each other, opening the doors to better-paying jobs. FastForward’s initial evaluation found that enrolled students who earned an industry-recognized certification increased their earnings by nearly $4,000 per year.

Congress could do something similar nationally by creating and funding a federal certification program for career paths in fields with high job demand and good prospects for upward mobility, such as advanced manufacturing and cardiovascular technology. Federal standards will establish common quality criteria and a common language around the skills necessary for career success in every field. This will make factories and hospitals across the country more willing to hire graduates from out-of-state programs because they will know what they are getting. It will also be easier to stack credentials across different industries, providing employees with greater career mobility.

Creating better pathways to career and technical education in the United States requires institutional building rather than market-based reforms, similar to the Biden administration’s approach in areas such as infrastructure investment and clean energy. Cities and states must be able to tailor career and technical education to the strengths of the local economy; But only the federal government can provide nationwide reliability and funding to create better jobs for the majority of Americans who lack the four basics. year degree.