Trends in Educational Pathways

        We have shown that while education has played a role in the recent deterioration in wage outcomes, there is still considerable variation that remains within each education group. This unexplained residual motivates the sections that follow. Specifically, it may be that the timing of education and how it is combined with work influences wages in different ways (cf. Light, 1995). We may thus be able to explain more of the observed variation in outcomes by better understanding the contextin which education is obtained.

        We begin by looking at how the timing of education has changed. In general, young adults are taking longer to leave school permanently and enter the labor force (Klerman & Karoly, 1994). In our data, we measure this transition by identifying the last time an individual is observed in school, and then using this point to delineate the schooling and postschooling periods in an individual's career.[6] We find striking cohort differences in the timing of education. Young adults in recent years are more likely to be in school at later ages and are therefore taking longer to complete their education. For most of the educational groups, the recent cohort averages about an additional year in school as compared to the original cohort. For example, among youth with some college experience, 50% of the original cohort had not yet completed their education by age 21, while this figure is almost 80% in the recent cohort. Among bachelor's graduates, 50% of the original cohort had not completed their degree by age 24, while 60% had not done so in the recent cohort.

        Has this extended enrollment occurred because young men are interrupting their schooling more often, or because they are staying in school longer and working more in the process? In Table 1, we see that the prevalence of exclusive enrollment has dropped for all education levels. These striking shifts away from exclusive enrollment leave many more individuals working while in school. In fact, working while in school is now the dominant pathway for most education groups--between a half and two-thirds take this route.[7] There has also been a pronounced rise in interrupted schooling among the less educated, however, especially for those who go to college but who do not receive a degree or who stop at an associate's degree. Why interruptions have increased for these youth in recent years is an important question for future research; perhaps continuous schooling is now more difficult to maintain for those with fewer family resources. By contrast, interruptions are far less common among bachelor's graduates. This suggests that we are seeing greater volatility in the educational experiences of the less educated, and a reduction in volatility for the more educated.

        The important question, then, is how wage growth is affected by working while in school and interrupting enrollment, now that these are the dominant pathways. We will take up this question formally in the next section, but it is worthwhile to take an initial look by way of motivation. In the first half of Table 2, we show mean wage growth by cohort and pathway (for the sake of simplicity, we label continuous enrollment as "clean" transitions). First note that in general, wage growth has deteriorated across the board in the recent cohort, replicating our findings in Figure 1.

        However, choices about which education pathway to take apparently have a greater impact in the recent cohort--the differences between the pathways are greater. For example, working while enrolled on average yields 36% higher wage growth than clean transitions, while this increase was only 17% in the original cohort. On one level, this is encouraging, since working while enrolled has become much more common in recent years. So has interrupted schooling, however, and here, the story is less encouraging. Compared to working while in school, interruptions are now more detrimental than they were in the past, yielding a drop of 8% in wage growth in the recent cohort compared to 5% in the original. This is not an insignificant difference for those with working-class incomes, and we should note that it is even stronger among sub-baccalaureate youth--precisely those groups that are interrupting their schooling the most.

        Thus, the recent shift toward "nontraditional" pathways into the labor market has been beneficial for some workers, but not for others. In particular, there has been a deterioration in wage growth when interrupting and then returning to school, a worrisome trend in an economy where lifelong learning and skill upgrading have become so important.

        Finally, the bottom half of Table 2 shows that the new pathways are also generating more polar and unequal wage outcomes in recent years as compared to the past. This should come as no surprise given the overall increase in inequality evident in Figure 1. What stands out, though, is that the increase is strongest for the interrupted schooling pathway. Given a more demanding labor market, incentives or penalties for these interruptions are of primary importance. In the original cohort, interrupted schooling did not yield noticeably greater inequality than other pathways; however, in the recent cohort, it apparently does. In fact, the rise in variance has been especially pronounced for sub-baccalaureate youth. Such a growing uncertainty of outcomes can be both an incentive and disincentive to continuous learning. Greater variance means that some workers will do especially well when they return to school to gain more education. On the down side, it means that this extra effort does not always pay off. To wit, about 10% of associate's graduates who interrupt their enrollment can expect to experience real wage losses between ages 16 and 36--the figure for those with some college experience is 9%.

[6] Since we are trying to track movement in and out of school in this analysis, we must exclude from consideration anyone who was not enrolled in school at least once during the survey. As mentioned in the "Measurement" section, this removes individuals who enter the study having already completed their education, and it does so consistently for both surveys. We also remove Vietnam veterans (708 cases) from this analysis, since their schooling was artificially postponed. Including them does not eliminate, but does reduce, the strength of the differences that we end up observing.

[7] We tested whether the recent cohort is working more while in school simply because they remain in school longer. A measure that controls for this difference is the percent of time both enrolled and working. We computed this measure and found it larger in the recent cohort for all education groups. Therefore the trend toward increased working while enrolled is true in an absolute and relative sense.