OECD report highlights global shifts in higher education

"Education at a Glance 2011: OECD Indicators" is the latest edition in an annual series that analyses education data from the Paris-based group's 34 member countries, which include many European countries as well as Australia, Canada, Japan, Mexico, New Zealand, South Korea, and the United States. This year's compilation also includes data from non-OECD countries, including Brazil, China, India, and Russia.

The global economic crisis that began in 2008 has underscored the value of higher education, disproportionately affecting people without college degrees, according to a new report from the Organisation for Economic Co-operation and Development (OECD). The economic situation has also had a dampening effect on international student mobility.

The new findings highlight the benefits of higher education both to individuals and society, said Andreas Schleicher, head of the OECD's Educational Statistics and Analysis Division and the report's main author. Even as the number of people worldwide with college degrees has risen dramatically, there has been little depreciation of the value of higher education. "One of the questions had been whether those people with college degrees are going to end up doing the jobs done previously by those with high-school degrees, and this has not happened," he said.

The earnings premium for graduates is especially high in the United States, where individuals with a college degree can expect to earn 79 percent more than someone who has completed only secondary education. College graduates in the United States also generate more public revenue, mostly through higher tax contributions, than in any other country, and Mr. Schleicher said that the findings should be taken to heart by policy makers deciding the future of public financing of higher education.

The OECD's data also illustrate how steeply the U.S. share of the global talent pool is declining, as higher-education systems in countries such as China and South Korea expand. Nearly a third of people ages 55 to 64 with college degrees are in the United States, but for 25- to 34-year-olds, the U.S. share is just 18 percent. China, in comparison, has just 6 percent of the global share of the older age group with college degrees, but the figure jumps to 16 percent for the younger generation. South Korea's share grows from 1.4 to 5 percent in the younger generation.

The United States also stands apart in terms of the cost of higher education. In the United States a graduate can expect to spend $70,000 in direct costs, compared with the OECD average of $11,000. Even in England, where tuition rates at most universities are set to nearly triple beginning next year, the financing structure does not place such a heavy direct toll on families. "What they have essentially introduced is a graduate tax with a bit of a loan," Mr. Schleicher says of the English system, which will require graduates to begin paying back loans once their incomes have reached a certain level. The only countries that come close to the United States in terms of direct costs, he said, are South Korea and Japan, "but in these countries they have a very strong culture of saving, and people still have the money."

In what he describes as a profound structural shift, Mr. Schleicher said the economic crisis has heightened the impact that a factor such as education level has on people's lives, and that this correlation will persist even if the global economy turns around. "It's not that we have so many more poor or rich people than before, but the fact that low levels of education have such a strong impact on future success is what has really changed," he said.

The economic turmoil of recent years has also taken a toll on international student mobility, slowing the rate of growth for out-of-country enrollment figures from 8 percent in 2007-8 to 3.3 percent in 2008-9.
Even as the U.S. share of this globally mobile student population shrinks, from 23 percent in 2000 to 18 percent in 2009, the United States faces the problem of falling competency standards among its own students. With 42 percent of 15-year-olds scoring below the reading level necessary for secondary studies, "it will become increasingly difficult to supply institutions of higher education with students that are able to follow and complete their studies," the report says.

Faced with so many challenges, the choices for policy makers are fairly straightforward, if politically difficult, Mr. Schleicher said. "We all know that long-term individual gains and long-term fiscal gain from higher education are high, but the financial pressures are in the short term." The potential benefits from making tough economic decisions about investing in higher education are evident in the figures from countries that, according to Mr. Schleicher, "have the answer." Canada and the Nordic countries have decided that "society is willing to pay higher taxes to support the future promise of society," he said. "So far, those countries have done well—they have very equitable distribution of access to higher education and very few disparities in outcomes."