Rising Education Levels Provide Diminishing Economic Boost

The U.S. lacks a key ingredient that helped propel it to economic dominance in the 20th century: productivity gains from higher education. Figuring out why could help influence the economy’s long-term trajectory once it emerges from the coronavirus crisis.

In 2009, President Obama, worried about the economy’s global standing, set a goal for the U.S. to have the world’s most-educated workforce by 2020.

The share of U.S. workers with college degrees has grown significantly, even if the country fell short of his goal. But those gains haven’t translated into a substantial productivity boost as Mr. Obama and economists hoped.

Rising education levels—first in high school, then in college and graduate school—helped fuel strong economic growth in the latter half of the past century. In 1910, just 14% of Americans age 25 or older had a high-school diploma and just 3% had a bachelor’s degree, census data show. By 2000, 84%

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