Why should we care about the sub-baccalaureate labor market? In the first place, this has been a large and rapidly growing part of the labor force: The group with "some college" represented 13.1% of the labor force in 1967 but 20% in 1988, with an especially large rate of increase (from 5.3% to 10.5%) among women. In addition, those with a high school diploma increased from 36.3% to 39.6%. Thus, the sub-baccalaureate labor market as we have defined it includes about three-fifths of all workers. In contrast, those with baccalaureate and graduate degrees increased from 11.6% of the labor force to 22.5%--a higher rate of increase, but this group is still only one-third the size of the sub-baccalaureate group. At the other end of the education hierarchy, those with less than a high school diploma decreased in number from 39% to 16.8% of the labor force as part of the process of educational upgrading which has taken place throughout this century.
Another way to see the importance of this segment of employment is to look at trends in relative wages, which signal changing patterns of demand. Among men, those with "some college" earned one percent less than men with a high school diploma in 1970, indicating that employers were unwilling to pay any premium for whatever knowledge or skills these individuals had. By 1975, those with some college earned 1.7% more, a trivial difference--but one that increased to 4.4% in 1980 and to 10.9% by 1987. Among women, those with "some college" earned almost precisely the same as did high school graduates in 1970; but by 1975, they earned five percent more. As for men, this premium increased during the 1980s from 10.4% in 1980 to 12.4% in 1985 to 17.3% in 1988. Evidently, then, the demand for those with some college relative to those with a high school diploma only has increased over the past two decades.[2] Furthermore, many occupations with high proportions of individuals with "some college" are projected to continue growing at a greater than average rate, including certain health occupations; technicians and related support occupations; marketing and sales occupations; and some administrative support occupations, including computer operators (Silvestri & Lukasiewicz, 1989).
From the viewpoint of educational institutions, the sub-baccalaureate labor market is crucial. Two-year colleges--community colleges and technical institutes--have increased their enrollments substantially over the past thirty years: In 1960, thirteen percent of Fall undergraduate enrollments were in these institutions, climbing to twenty-seven percent by 1970, thirty-eight percent by 1980, and forty-four percent by 1991 (National Center for Education Statistics [NCES], 1989, 1992). While many students in these institutions plan to transfer to four-year colleges and earn B.A. degrees, in fact a small and declining number manage to do so (Grubb, 1991); a majority of students in community colleges (about 60%, according to 1990 figures[3]) and virtually all those in technical institutes describe themselves as occupational students. As a result, the majority of students in the fastest growing segment of postsecondary education are headed for the sub-baccalaureate labor market; therefore, the operations of this market are crucial to the success of these institutions. In addition, dropout rates from four-year colleges have increased (Grubb, 1989), adding yet another group to the pool entering the sub-baccalaureate labor market.
In addition, the most explicitly occupational programs within education send their students to the sub-baccalaureate labor market. The occupational students in community colleges and technical institutes, with some exceptions,[4] are preparing for employment within this segment; and vocational programs in high schools also aim for entry into this part of the labor market.[5] Thus, the effectiveness of vocational education in enhancing employment at both the secondary and the postsecondary levels depends in crucial ways upon how the sub-baccalaureate labor market operates. Particularly as the movement for accountability in education has begun to affect vocational education with performance measures and standards introduced by the Perkins Amendments of 1990, institutions which seek to improve the prospects of their students need to know how this labor market operates.
Despite the growing importance of the sub-baccalaureate labor market, there is remarkably little information about it. The effects of baccalaureate and graduate degrees on employment have been extensively studied (as reviewed in Leslie & Brinkman, 1988), and of course, there is a substantial literature on the overall effects of education on employment. However, the group with "some college" has not often been examined partly because the most common data sets contain no detailed information about this heterogeneous group and the data that does provide some detail on the group with "some college" is often incomplete.[6] The available results indicate that the economic benefits of sub-baccalaureate education are quite varied: While there are substantial economic returns to associate degrees (for men and women) and to certificates (for women only), the returns for those who enroll in postsecondary institutions but fail to complete programs are highly uncertain. In addition, returns depend critically on the field of study, with economic effects higher for health and technical occupations, and also depend on whether individuals find employment related to their field of study.[7]
Moreover, the most common way of studying the interaction between education and employment--statistical analysis of large data sets--fails to provide much information about how formal schooling improves (or fails to improve) employment opportunities. The usual quantitative analysis measures the increase in wages or earnings which can be attributed to different levels of schooling but can say nothing about the reasons for hiring (or not hiring) individuals with more schooling, about the skills that employers look for and the hiring procedures they follow, and about the institutional relationships between providers of education and training and the employers who use that education. That is, conventional analyses describe the outcomes of markets for education and training, but they say little about how those markets operate. Particularly for purposes of improving education and training and making postsecondary institutions more effective, it is crucial to understand the detailed workings of these markets.
[2] These figures are taken from Current Population Survey (CPS) data, as reported in Grubb and Wilson (1992). In their study of inequality, they find that increases in inequality during the 1980s were caused by changes related to educational shifts, including higher returns to education and increasing numbers of educated workers. While these changes were more pronounced for the group with baccalaureate and graduate degrees, they were still substantial for the group with "some college." The CPS figures corroborate results from elsewhere, including the Survey of Income and Program Participation (SIPP) data and the National Longitudinal Study of the Class of 1972 (NLS72) data cited in Grubb (1992b), indicating that women benefit from postsecondary education more than men.
[3] These figures are taken from preliminary runs of the U.S. Department of Education's National Postsecondary Student Aid Survey (NPSAS) of 1990 data set which is currently being analyzed by John Tuma of MPR Associates, Berkeley, California.
[4] Rates of transfer to four-year colleges have become as high among occupational students--particularly those in business and health--as among academic students (see Grubb, 1991).
[5] High school dropout rates are higher among those in vocational programs than in academic programs, and so many high school vocational students find themselves in the unskilled labor market; but vocational programs intend to have their students graduate--particularly in a period of greater attention to high school dropout rates--so they focus on preparing their students for entry-level jobs in the sub-baccalaureate labor market.
[6] For example, the NLS72, the basis for Grubb (1992b) and Kane and Rouse (1992), includes only a young cohort while many community college students are older; the SIPP data contains much less information on postsecondary education and too few variables for sophisticated multivariate analysis.
[7] These results are based on Grubb (1992b, forthcoming-b) and Kane and Rouse (1992); for a review of earlier studies, see Grubb (1992b).