Thursday, June 14, 2012

Higher Education: Supply Finally Responds to Demand?

There was an interesting article by Tim Sprinkle on the Yahoo Finance Blog, The Exchange: What’s Next for the Overcrowded Job Market? Fewer Graduates. It carried this lede:
"It's simple supply and demand: too many graduates, not enough jobs."

Sprinkle mainly focused on the well-known glut of law school graduates. He pointed out that a number of top schools were beginning to limit the number of admissions they would accept. That action was in response to facts like these:

"According to the National Association for Law Placement (NALP), we're in the middle of the worst job market for legal grads in nearly a generation. The overall employment rate for the law school class of 2011 fell to the lowest level since 1994 — just 85.6 percent — and is down two percentage points from the year prior. In fact, the law school employment rate has been dropping steadily since peaking at 91.9 percent in 2007."

"What's worse, only 65.6 percent of law graduates last year found jobs that even required bar membership in the first place, suggesting that their law school careers were very challenging, very expensive three-year vacations from the real world."

Sprinkle then pointed out that similar cutbacks were occurring at institutions offering other professional degrees such as MBAs, and at those offering doctoral programs in the humanities and the arts.

Sprinkle finished with this intriguing comment:

"Even undergraduates are starting to get the message that there may not be a high-paying job at the end of their higher education rainbow. According to the U.S. Department of Education's National Center for Education Statistics, enrollments at degree-granting institutions spiked 38 percent between 1999 and 2009, from 14.8 million to 20.4 million, but students these days are increasingly focusing on more "job market ready" fields. According to enrollment statistics from UC San Diego, for example, declared majors in science/math are up 94 percent since 2001, while biology and engineering jumped 51 percent and 21 percent, respectively. On the other hand, arts majors are down 26 percent in that time."

To one who thinks the country would be in better shape if it produced more scientists and engineers, these numbers sounded promising. Could it be that college is now viewed as a place to go and accomplish difficult tasks such as graduating with a degree in science and engineering? Could it be that the fact that high paying jobs are available to those who are willing to make the investment is finally having an effect?

An investigation of the UC San Diego (UCSD) numbers was not as conclusive as Sprinkle’s comment suggests. In the case of engineering, the UCSD numbers did increase by 21% over 10 years, but overall enrollment increased by 32%. Consequently, the fraction of students enrolled in engineering programs actually fell—not good news. On the other hand, all of the increase in engineering enrollment took place over the last three years—possibly great news. Data from one university is too easily biased by changing priorities within that institution itself. Other sources of data were needed.

Better than enrollment data are graduation data. The National Science Foundation (NSF) provides data on enrollment in science and engineering (S&E) and on degrees awarded in those areas. Consider the nation’s engineering enrollment.

There seems to be an uptick in participation when the economy is in bad shape. Of particular interest is the surge that occurred starting in 2007, about the time the economy began to unravel. This data stops at 2009. Hopefully, the trend continues.

The NSF also provided this chart of bachelor’s degrees granted over the last decade.

There are no obvious trends evident yet in engineering, mathematics or the physical sciences. Not surprisingly, there has been significant and consistent growth in the biological and social/behavioral sciences. The most obvious example of supply and demand arises from the number of computer science degrees awarded. That field grew rapidly during the 1990s, driven by the dotcom bubble. After the burst, and the realization of how easy it was to offshore computer programming, enrollment in this area dropped just as rapidly.

The NSF database provides information on degrees grated between 2000 and 2009. Over that period the total number of bachelor’s degrees granted increased by 29%. Degrees in all of S&E increased by 27%, and only by 18% in engineering. If, as Sprinkle and the UCSD data suggest, there is a surge of people moving from other majors into S&E, it is too early to show up in the degree data.

Let us be cautiously optimistic.

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