Joe Cortright Talent Dividend Metrics

Talent Dividend Metrics
A Progress Report

Joe Cortright
April 2010

Working Draft / Subject to Revision / April 2010

Roadmap
1. The Talent Dividend Calculation
2. Four Key Metrics
3. Years of Post Secondary Education
4. Dynamics: Migration, Retirement
5. Next Steps


Talent


The Hypothesis
• Better educated metropolitan areas have
higher incomes
• Better skilled workers are more innovative
and productive


0% 10% 20% 30% 40% 50%
Washington-Arlington-Alexandria, DC-VA-MD-WV
San Jose-Sunnyvale-Santa Clara, CA
San Francisco-Oakland-Fremont, CA
Boston-Cambridge-Quincy, MA-NH
Raleigh-Cary, NC
Austin-Round Rock, TX
Minneapolis-St. Paul-Bloomington, MN-WI
Seattle-Tacoma-Bellevue, WA
Denver-Aurora, CO
New York-Northern New Jersey-Long Island, NY-
Baltimore-Tow son, MD
Atlanta-Sandy Springs-Marietta, GA
San Diego-Carlsbad-San Marcos, CA
Portland-Vancouver-Beaverton, OR-WA
Hartford-West Hartford-East Hartford, CT
Chicago-Naperville-Joliet, IL-IN-WI
Columbus, OH
Kansas City, MO-KS
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Charlotte-Gastonia-Concord, NC-SC
Richmond, VA
Rochester, NY
Salt Lake City, UT
Sacramento-Arden-Arcade-Roseville, CA
Indianapolis-Carmel, IN
Dallas-Fort Worth-Arlington, TX
Milw aukee-Waukesha-West Allis, WI
Los Angeles-Long Beach-Santa Ana, CA
St. Louis, MO-IL
Nashville-Davidson-Murfreesboro-Franklin, TN
Miami-Fort Lauderdale-Pompano Beach, FL
Orlando-Kissimmee, FL
Providence-New Bedford-Fall River, RI-MA
Houston-Sugar Land-Baytow n, TX
Phoenix-Mesa-Scottsdale, AZ
Pittsburgh, PA
Cincinnati-Middletow n, OH-KY-IN
Virginia Beach-Norfolk-New port New s, VA-NC Four Year College
Detroit-Warren-Livonia, MI
Buffalo-Niagara Falls, NY
Oklahoma City, OK
Birmingham-Hoover, AL
Attainment Rate
Cleveland-Elyria-Mentor, OH
New Orleans-Metairie-Kenner, LA
Jacksonville, FL
Tampa-St. Petersburg-Clearw ater, FL
San Antonio, TX
Memphis, TN-MS-AR
Louisville-Jefferson County, KY-IN
Las Vegas-Paradise, NV
Working DraftRiverside-San Bernardino-Ontario, CA
/ Subject to Revision / April 2010

The Evidence
Education Explains Most Differences in Metro Income
Annual Per Capita Income, 2005

NY
$50,000
$48,000
SEA
$46,000 HAR DEN
MIN
PHI
$44,000 HOU BAL
SAN y = 763.27x + 16466
CHI R2 = 0.5846
$42,000 MIA
NO DAL
LA
MIL
$40,000 PIT
LV DET RIC
CHA
NASIND
STL
BIR PRI SAC KC
JAC
CLE
$38,000 CIN POR
RAL
LOU ROC COL ATL AUS
MEMTPA OKC
$36,000 VB SLC
PHO
BUF
$34,000 SAT ORL

$32,000
$30,000
15 20 25 30 35 40 45
Percent of Population with a 4-Year College Degree, 2006
Sources: BEA (Income), Census (Education)

Estimating the Gain
• Each 1% improvement in college
attainment is associated with a $763
increase in per capita income for the entire
metropolitan area
• These education gains are the product of
a shift in the entire skill distribution, not
just moving 1% past the 4 year mark


Make progress at every stage


Additional Evidence for the Talent
Dividend
• President’s Council of Economic Advisors
• Unemployment Rate Differential in the
Great Recession


Educational Gains Stagnating

For decades, the number
of educated American
workers grew faster
than did the demand for
them. But beginning with
the cohort that completed
its schooling in the early
1970s, the growth rate in
the supply of educated
Americans slowed
significantly.


Least well educated metros have
highest unemployment rates


“Social Returns” to Education

Ed Glaeser: Well-educated metro’s had lower unemployment rates than
explained by individual educational attainment. Poorly educated metros had
unemployment rates 1.8 times higher than explained by individual levels of
education.

2. Metrics for improving
attainment

• High School Completion
• College Continuation
• Adult Post-Secondary Education
• College Completion


Different Sources of Data
– Institutional
• Enrollment records
• Generated by schools
• Aggregated by others (NCES, NCHEMS, NSC)

– Population
• Survey data
• Gathered by Census Bureau
• Covers entire population; sampling variability


Institutional Measures
• Administrative records from educational
institutions
– Diplomas, Enrollment
• Reported to and aggregated by national
organizations
– NCES, National Student Clearinghouse
• High coverage/ Can drill down; but can be
vague and anomalous


High School Completion
• Cumulative Promotion Index
• Product of high school grade level success
rates:
– [(9th to 10th %) x (10th to 11th %) x (11th to 12th)
% x (12th to Diploma %)]
• If 90% are promoted each year
– CPI= .9 x .9 x .9 x .9 = 65.1%
• Computed from NCES data


High School Graduation Rates
(CPI Method)
WAS
CIN
PDX
DET
SAC
IND
NY
BAL PHI
MEM RIC KC
VBN RAL ROC
HOU RIV DEN NAS
ATL OKC LOU MIL
SLC AUS STL SDO
JFL BIR CLE SEA
TSP LA SJO DFW CHI MSP
PHX LV MIA CHA ORL COL SAT SFO BUF

35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85%

Source: Computed from NCES/CCD

College Completion
• Institutions report 6-year graduation rate
for four-year institutions
• Data reported by institutions, tabulated by
IPEDS
• We sum by metro area, weighting
institutional rates by enrollment for four-
year institutions.


College Graduation Rates
SDO
COL
LA
SEA
RIC SAC
STL ORL
ATL CLE ROC
JFL BUF AUS
TSP NAS BOS
MIA VBN BAL
PDX RIV PHI
OKC CIN HAR
DFW NY RAL
DET NOLA CHA PIT
SLC IND BIR PRO
MEM LOU MIL SFO
LV KC CHI SAT
PHX HOU DEN WAS MSP SJO
10% 20% 30% 40% 50% 60% 70%

Source: Computed from IPEDS

National Student Clearinghouse


Population Measures
• Data from American Community Survey
• Two Questions:
– Attendance
– Attainment
• Asked of 1% Sample Annually
• Use 3-year 2006-2008 pooled sample


MicroData Tabulations


ACS Attendance Question


The ACS
Attainment
Question


High School Completion (on time)
• What percent of 19 year olds report having
received a high school diploma or GED?
• Census question makes no distinction
between diploma and GED


College Continuation
• What proportion of 18 to 24 year olds who
have completed high school are enrolled
in college?


College Enrollment
Percent of 18-24 Year Olds Attending Post-Secondary Education

SAT
PDX
CHA
HOU
MEM LA SJO
TSP CIN ROC
SEA CLE NAS BUF
SLC SDO WAS PIT
IND BAL MIL PRO
DFW RIC STL HAR
LOU SAC OKC COL
KC BIR MIA AUS
PHX ORL DET PHI
JFL VBN NOLA CHI SFO RAL
LV DEN RIV ATL MSP NY BOS

25% 30% 35% 40% 45% 50% 55%
Source: American Community Survey, PUMS, 2006-2008

Adult Post-Secondary Education
• What proportion of 25-44 year olds, who
have completed high school, but do not
have a bachelor’s degree, attended
college classes?


Adult Enrollment and Age
Enrollment Declines with Age
Percent of Persons with Less than a BA Degree Attending College Classes, by Age

18.0%

16.0%

14.0%
Attending College Classes

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%
2
R = 0.983
0.0%
20 25 30 35 40 45 50 55 60 65 70
Age


Adult Post-Secondary Attendance
25 to 44 Year Olds with No Four-Year Degree Attending Post-Secondary Classes

RIC
KC LA
PRO TSP
PHX RAL
PIT RIV
MIL LOU ORL
ROC BOS CHI SEA PDX
NY PHI HOU COL MIA SAT SJO
DFW NAS ATL AUS HAR CLE WAS OKC
NOLA CHA CIN MSP STL JFL BAL SLC VBN
LV BIR BUF DEN IND MEM DET SFO SDO SAC

5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5%


College Completion
• What percent of 24 year olds report having
received a four-year college degree?


College Completion
24 Year Olds with a Four-year degree or higher
CHA
BOS
ROC
IND
OKC
BAL
DEN
ATL
PRO
SEA
CLE CHI
SDO CIN MIL
DFW PDX HAR BUF
DET RIC BIR MSP
SAC TSP ORL NAS NY
LV PHX LA STL COL
SAT NOLA MEM SJO PHI
SLC HOU MIA SFO PIT
RIV VBN JFL LOU AUS KC WAS RAL

10% 15% 20% 25% 30% 35% 40% 45%


Making Use of the Data
• Where am is my region strong and weak?
• Who is doing better that I might learn
from?
• Are there special conditions that affect
local performance?


Years of Post-Secondary Education

• Four-year degree attainment rate is too
simple to capture the “size” of the Talent
Dividend challenge
• How much additional education is needed
to raise the attanment rate?


YPSE Weights

Value Years of PSE
High school graduate, or Less 0
Some college, less than 1 year .5
One or more years of college but no degree 1.2
Associate degree 2
Bachelor's degree 4
Master's degree 5
Professional degree 5
Doctorate degree 7


YPSE v. 4 year attainment
Years of Post-Secondary Education Correlates with BA Attainment
y = 0.2097x - 0.0634
2
R = 0.9763
60.0%

50.0%

40.0%
BA Attainment Rate

30.0%

20.0%

10.0%

0.0%
0 0.5 1 1.5 2 2.5 3 3.5
YPSE: Years of Post-Secondary Education


How much effort?
• Years of Post-Secondary Education
• Portland: About 100,000 person years of
additional post-secondary education to
raise the four-year college attainment rate
by 1 percentage point.


Adding Dynamics
• Our talent measures are “snapshots”
• We need to account for movement in and
out of the working population
• Movement in time: Retirements
• Movement in space: Migration


Dynamics
• Migration
– Workers are constantly moving in and out of
every metropolitan area
• Retirement
– Young people are entering the labor force
– Older workers are reaching retirement age


Migration
• About 2.7 million working age persons with
four-year degrees move to a different
metropolitan area each year


Talent Migration *
Net In-Migration of Working Aged Adults with a Four-year Degree

PHI
CHI JFL
MIL BAL LOU SLC
PRO CIN VBN DFW TSP
NY BUF SFO PIT PDX
HAR IND WAS ATL PHX
ROC BOS NAS SDO SAT RAL
MEM ORL COL SJO HOU CHA LV
NOLA DET LA MSP KC RIC SAC RIV SEA AUS
-1% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.5%

* Not adjusted for international out-migration


Retirement:
Boomer Talent Exodus
Number of College Educated Leaving Will More than Double

1,400,000

1,200,000
College Educated Persons Turning 65

1,000,000

800,000

600,000

400,000

200,000

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Year


Retirement Rate Rising Everywhere
ATL
AUS
CHA
RAL
IND
COL
MSP
MIL
DFW
MEM
NAS
BOS Next Five Years
KC
CHI
DEN Last Five Years
DET
SEA
PRO
BIR
PDX
SJO
HOU
CIN
NY
PHI
RIC
PIT
WAS
VBN
STL
SLC
LOU
BAL
NOL
HAR
SFO
BUF
CLE
LA Percent of Working Aged Adults with
ORL a Four-Year Degree or Higher
SDO
OKC
JFL Reaching Retirement Age
SAT
SAC
RIV
ROC
PHX
MIA
TSP
LV

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
% BA+ Reaching Retirement

• Career counseling – getting employers involved in
supporting college career paths
• Social marketing
• How to account for non-traditional, part-time students
• Value of liberal arts in synergy with vocational
• 2 and 4-year institutions working together; also
reconciling data on 2-yr 4-yr grad rates
• Long term pipeline balance with short term results of TD
• Race and ethnicity; come up with better language
• Tension between TD as initiative and goal; define short-
term strategies to help get big-wins; speed as theme with
prototyping as strategy
• Compounding value of doing the 1%
• Where are the gaps that business community should
take on.

Typical Improvement
• Can we move Portland (33.3% college
attainment to the same level as
• San Diego (34.2%) or Atlanta (34.6%)
college attainment?
• The Portland Talent Dividend
$1.6 Billion Annually


Share of 18 to 24 Year Olds Attending College
Percent of 18 to 24 year old residents enrolled in college

0% 10% 20% 30% 40% 50%
Raleigh-Durham

Portland

Las Vegas

Joe Cortright Talent Dividend Metrics

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