SAN FRANCISCO, October 12, 2015—California will fall about 1.1 million college graduates short of economic demand by 2030, if current trends persist. The number of highly educated workers from elsewhere is unlikely to be large enough to bridge this workforce skills gap. But the state and its higher education institutions can take several practical steps to close it.
These are the key findings of a report released today by the Public Policy Institute of California (PPIC).
The report projects that 38 percent of all jobs in California will require at least a bachelor’s degree in 2030. But only about 33 percent of workers will have these degrees—a small increase since 2013, when 32 percent of California workers had them. While the state is expected to experience declines in the share of high school dropouts and increases in the share of college graduates, these improvements will not make up for the large numbers of highly educated baby boomers retiring from the labor force.
For some time, the arrival of international immigrants with college degrees has played an important role in increasing the share of young, highly educated workers—particularly in the technology sector. But it is unlikely that further increases in international migration will be sufficient to meet future demand.
“California’s workforce skills gap is substantial,” said Hans Johnson, PPIC senior fellow and an author of the report. “But if we can improve educational outcomes, the benefits are significant—higher incomes for residents, lower demand for social services, and a more competitive California economy.”
The PPIC report updates and expands earlier PPIC work on the workforce skills gap. Its new projections account for the way the state economy and the educational attainment of Californians changed during the Great Recession and the subsequent recovery. It is based on recent trends in educational attainment and on long-term occupational projections from the state’s Employment Development Department.
The report finds that the most promising approach to closing the workforce skills gap is to concentrate on improving the educational attainment of California residents. It outlines four key strategies for the state and its colleges and universities to pursue. Implementing these strategies—which should be the core of a new state plan for higher education—would require increased coordination across institutions.
- Increase access. Research shows that students are much more likely to earn a bachelor’s degree if they first enroll in a four-year college, rather than community college—even when we account for differences in academic preparation. This means that increasing the share of high school graduates eligible for the University of California (UC) and California State University (CSU) would be an important step toward increasing the number of college graduates. It would also improve access for students from low-income families and other underrepresented groups.
- Improve completion rates and time to degree. Despite progress by both university systems to increase completion rates and shorten the time it takes to graduate, only 19 percent of students at CSU and 60 percent of those at UC earn a bachelor’s degree in four years. The strategies adopted by CSU and UC to graduate more students more quickly should be assessed to identify which are most effective. And new approaches—such as offering colleges fiscal incentives to increase the share of students taking a full load of 15 units—should be considered.
- Expand transfers to four-year colleges. Improving transfer pathways from community colleges to four-year institutions is essential because California relies heavily on its two-year institutions. Currently, the vast majority of community college students do not earn degrees or certificates. Associate degree programs guaranteeing the transfer to CSU for qualified community college students should be expanded. These programs now depend on individual agreements between specific campuses and apply only to specific majors; expanding them to include more majors and transfers to UC is likely to increase the number of students who ultimately earn bachelor’s degrees.
- Be smart about aid. Grant and aid programs mean that most low-income and even some middle-income students do not have to pay tuition at the state’s public colleges and universities. But other educational costs are not well covered and student debt has been rising, raising questions about whether state Cal Grants should cover more than tuition. The state should also consider increasing the size of Cal Grants to students attending private colleges with good graduation rates and low loan-default rates.
The report concludes that a state plan for higher education should ensure that enough high school graduates are ready for college, enough slots are available for new college students, more community college students are able to transfer to four-year institutions, and more students complete college in four years. Most important, California and its higher education institutions must strengthen access to and success in college for low-income and underrepresented students.
The report is titled Will California Run Out of College Graduates? Johnson’s coauthors are PPIC research associate Marisol Cuellar Mejia and PPIC research fellow Sarah Bohn.
PPIC is dedicated to informing and improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett. PPIC does not take or support positions on any ballot measure or on any local, state, or federal legislation, nor does it endorse, support, or oppose any political parties or candidates for public office.