While a larger population of highly-educated workers has meant greater productivity and quicker growth for the U.S. economy, it’s also resulted in the displacement of workers whose qualifications don’t include a college degree. Accordingly, the workforce has stratified, producing rifts in employment rates, wages, income, and quality of life.
And though that dynamic doesn’t bode well for future economic growth, some economists believe that the market may be ripe for another shift that could help workers at the lower end of the education spectrum recoup some of the ground they’ve lost since the recession. In a new study, Dale W. Jorgenson of Harvard University, Jon D. Samuels of the Bureau of Economic Analysis, and Mun S. Ho of the D.C.-based think tank Resources for the Future write that while an influx of young, educated workers has helped contribute to American economic growth in recent decades, the GDP boost attributed to an increasingly educated population won’t last forever. “The growth rate of the U.S. economy in the next decade will depend critically on the revival of the labor force participation rates that prevailed before the Great Recession,” they write. And the group with the most room for growth is workers without a college degree.
In their study, the authors take a look at the ebbs and flows in the share of Americans working, the education levels of workers, and overall skill levels, among other factors. They predict that even as a large portion of the American workforce attain college degrees (or more-advanced degrees), the growth of this group will soon hit a plateau. In order to stop GDP growth from plateauing too, economists and businesses will look for potential areas of growth. As a result, the authors hypothesize that the continuing recovery will beget an increase of jobs for those who suffered the most in the years following the recession.
How would this happen? Looking at the drivers of growth from the 1940s through today, the authors write that the most significant contributions to economic growth in the future will likely be derived from having more efficient and productive workers. Since there won’t be much growth in the share of workers with BAs or higher, these improvements will instead come in the form of greater hiring and productivity for workers who have a high-school degree or less. These workers will not only be more likely to find jobs, but they’ll also be working longer hours than they are now, likely in service professions. In the next decade, the study estimates that these changes will help produce a 2.49 percent acceleration of GDP, compared to the 2.34 percent GDP growth seen between 1990 and 2014.
This future, in which workers with less education will recoup some power in the labor market, can be hard to envision, especially when some estimates project that within the next few years, about 65 percent of U.S. jobs will require at least some college or an associate’s degree. But the authors are hardly suggesting that the next decade or so will be a golden age for workers who didn’t go to college. Instead, they think that jobs for these workers may never return to the highs seen during the investment boom from 1995 to 2000, yet are optimistic that they could return to pre-recession levels.