This chapter provides an overview of the labour market and higher education system in the state of Washington, an assessment of the labour market outcomes of graduates, and a discussion of state policies that contribute to aligning higher education and the labour market. The policy discussion focuses on five policy areas – strategic planning and co-ordination of higher education; funding; educational offerings; student supports and pathways; and information – and includes policy recommendations in each area.
Labour Market Relevance and Outcomes of Higher Education in Four US States
Ohio, Texas, Virginia and Washington
Higher Education
7. Washington
Abstract
7.1. The labour market and higher education in Washington
The economy and labour market
Washington’s innovation-driven economy is growing rapidly, but income gaps are widening
Washington has enjoyed the highest annual economic growth rate of any state in the United States in the last two years, with 5.7% growth in real Gross Domestic Product (GDP) in 2018 and 4.7% growth in 2017. The compound annual growth rate for real GDP in Washington for the ten-year period from 2008 to 2018 was 2.9%, compared to an annual growth rate for the United States of 1.8% (U.S. Bureau of Economic Analysis, 2019[1]). The strong performance of the information services sector has largely driven the overall economic growth of the state, a pattern that is expected to continue in the short- to medium-term. Indeed, Washington is home to two of the world’s largest companies – Amazon and Microsoft – as well as a host of other technology companies specialising in information services such as software, big data and cloud computing (ESD, 2019[2]).
With a population of about 7.5 million and a GDP of USD 563 billion in 2018, Washington’s economic output accounts for about 3% of total GDP for the United States (U.S. Bureau of Economic Analysis, 2019[1]). The top industries in Washington, each contributing a sizeable share of the state’s GDP, are finance; insurance and real estate; information; professional and business services; and government. Highest projected growth towards 2026 is expected in the information and professional and business services sectors. The high level of economic growth in Washington has contributed to growth in employment and wages, with higher personal income growth in Washington compared to the US average. In 2017, average annual wages grew by 5%, primarily driven by wage growth in the retail trade and information services sectors (ESD, 2019[2]).
At the same time, income inequality in Washington has increased substantially in the last three decades. The difference in hourly wages between the top and bottom 10% of earners in 1980 was approximately USD 26 per hour, compared to USD 43 per hour in 2018, adjusted for inflation (Keating, 2019[3]). Nation-wide, the gap in hourly wages between the top and bottom 10% of earners in 2018 was USD 37. Thus, while personal income growth has been rising in Washington, it has benefitted more individuals at the higher end of the income scale. Personal income levels also vary widely across the state. In 2017, per capita personal income for the state was USD 57 896. In King County – which includes Washington’s biggest city, Seattle – per capita personal income in 2017 was USD 83 383, compared to USD 35 587 in Franklin county, with the lowest per capita income in the state (OFM, 2019[4]).
The regions of Washington each have distinct economic profiles. With a relatively large government sector and dominant healthcare and retail trade industries, the south-western region has enjoyed substantial growth in personal income and GDP in the last five years. The north-eastern region has a strong agricultural economy and growing healthcare and tourism industries. The Olympic region to the west, formerly reliant on the timber industry, faces challenges with slow job growth and high unemployment, as does the south-central region, which has the highest unemployment rate in the state. Indeed, many regions outside the areas surrounding the Puget Sound (which include the cities of Seattle, Tacoma and Olympia) face similar challenges in terms of relatively high unemployment and lower educational attainment levels. In addition, it is estimated that 280 000 residents of Washington’s rural areas do not have access to broadband internet, which can have a negative impact on productivity (Washington Roundtable, 2018[5]).
Though educational attainment rates vary widely across the state, Washington’s workforce is well-educated. The higher education attainment rate (associate’s degree or above) is 48% for 25-64 year-olds (Figure 7.1). With the inclusion of post-secondary certificates, the proportion of the working-age population with some form of post-secondary credential rises to 56%, which is substantially higher than the US average of 48% (Lumina Foundation, 2019[6]). Compared to many other states, a relatively large share of Washington adults have either a workforce-relevant certificate (8%) or an associate’s degree (11%). However, the proportion of African Americans, Hispanics and Native Americans with a post-secondary credential is lagging behind that of Whites and Asians.
Figure 7.1. Levels of educational attainment for Washington residents aged 25-64, 2018
Source: U.S. Census Bureau (2019[7]), American Community Survey 2018 (database), https://www.census.gov/programs-surveys/acs/data.html.
The state’s population has experienced tremendous growth in the last decade. Washington has benefitted from substantial net in-migration of workers from other states, attracting more than 10 000 workers with at least some post-secondary education between 2011 and 2015 (WSAC, SBCTC and WTECB, 2018[8]). Of these, about 15% had a certificate or associate’s degree, 30% had a bachelor’s degree and 55% had a graduate or professional degree. In a national context, these figures place Washington fourth in overall net in-migration of workers with more than upper secondary education, and third for those with bachelor’s degrees and above (WSAC, SBCTC and WTECB, 2018[8]). In addition, Washington attracts many skilled workers from other countries (WTECB, 2011[9]).
Furthermore, the proportion of Washington residents above the retirement age of 65 (15%) is offset by a larger youth population, which forms the basis of the future workforce. At 22%, the dependency ratio in Washington is slightly lower than both the US and OECD average. Table 7.1 presents an overview of some key contextual indicators for Washington.
Table 7.1. Washington at a glance
Notes: All numbers are for 2018 unless otherwise noted. Racial and ethnic categories are mutually exclusive. MIT Living Wage annual calculations are based on full-time working hours (2 080 hours per year).
Despite a relatively high unemployment rate, labour shortages persist in several sectors across the state
The largest sectors of employment in Washington are government; professional and business services; and leisure and hospitality. Employment growth has been observed in every industry in Washington, except for mining and logging, with growth above the state average for the majority of industries in the last two years (ESD, 2019[2]). Furthermore, employment in the information services and professional and business services sectors continues to grow at a rapid pace, in line with patterns of wage growth and economic output. Wage growth, as measured in average hourly earnings, slowed after the recession of 2008-09, but has strengthened since 2015. Job growth has increased since the end of the recession and the number of high-wage jobs added to the economy has more than doubled since the early 2000s, primarily in information services, healthcare, aerospace and computer systems design (ESD, 2019[2]).
Despite strong employment and wage growth, however, the unemployment rate in Washington is higher than the US average. At 4.6% in June 2019, the unemployment rate in Washington ranked 45th out of 50 states (plus the District of Columbia) in the United States (U.S. Bureau of Labor Statistics, 2019[10]). This varies widely between regions and counties. In 2016, the unemployment rate in the south-central region was 7.2%, compared to 6.7% in the south-western region and 6.6% in the Olympic region (Washington Roundtable, 2018[5]). Based on unemployment insurance (UI) data, unemployment state-wide is concentrated primarily in the manufacturing and construction industries. State-wide, the unemployment rate is down from a ten-year high in early 2010. Figure 7.2 provides an overview of key labour market indicators in Washington.
Based on both current and projected employment patterns, labour shortages have been identified in several major occupational groups. At the middle-skills level, gaps in workforce supply and demand have been identified in service occupations, business, management and sales, as well as computer and information sciences. At the advanced skills level, there are large gaps in computer and mathematical occupations and in education professions (WSAC, SBCTC and WTECB, 2018[8]). In the ten-year period between 2016 and 2026, employment in computer and mathematical occupations has been projected to grow at a faster rate than other major occupational groups (ESD, 2019[2]). Gaps in skill demand and supply are examined further in Section 7.2.
Figure 7.2. Trends in key labour market indicators in Washington, 2009-19
Notes: Data in panels A, B and C are seasonally adjusted. The labour force participation rate is defined as the percentage of people who are either employed or unemployed (but looking for jobs) out of the total civilian non-institutional population, which includes all individuals over the age of 16 who are potentially available for work. The employment rate is the percentage of people who are employed out of the total civilian non-institutional population. The unemployment rate is the percentage of people who are unemployed (but looking for jobs) out of all individuals in the labour force (employed or unemployed but looking for jobs). The mean hourly wage is not adjusted for inflation.
Sources: Panels A, B and C: U.S. Bureau of Labor Force (2020[11]), U.S. Bureau of Labor Force Statistics from the Current Population Survey (database), https://www.bls.gov/cps/tables.htm. Panel D: U.S. Bureau of Labor Statistics (2019[10]), U.S. Bureau of Labor Statistics, Occupation Employment Statistics (database), https://www.bls.gov/oes/home.htm.
The share of households with job-related earnings and the proportion of the labour force with a full-time job remain below pre-recession levels (ESD, 2019[2]). The labour force participation rate state-wide was 64.3% in June 2019, just above the national average of 63%(Table 7.1) . Similar to the rest of the country, the labour force participation has been in decline since the recession. At the national level, declining labour force participation has been largely attributed to structural changes in the economy, including waning demand for routine-based manual labour (Abraham and Kearney, 2019[12]; U.S. Bureau of Labor Statistics, 2016[13]). In Washington, however, the labour force participation rate appears to be on the rise, as depicted in Figure 7.2.
Earnings in Washington are higher, on average, than in the United States overall. In the period between 1990 and 2017, wage growth has increased but disproportionately favoured the top 10% of earners (ESD, 2019[2]). Washington is also one of 29 states that has raised the minimum wage above the federal minimum, with a minimum wage in 2018 of USD 11.50 per hour. In 2014, the Seattle City Council approved an increase in the minimum wage to USD 15 per hour to be phased in over time, which was the highest minimum wage for any city in the United States when it was approved. The City Council invited researchers to evaluate the effects of the new policy, and several studies have been carried out by the University of Washington, as outlined in Box 7.1.
Box 7.1. The Seattle Minimum Wage Study
Seattle’s minimum wage ordinance to increase the minimum wage to USD 15 per hour took effect in April 2015. The increase was to be phased in over time, with small businesses implementing the minimum wage for its employees by 2021. The rate at which it increases depends on the size of the business and whether or not they contribute to employees’ health care.
A group of researchers at the University of Washington has studied the effects of the minimum wage increases on various employment outcomes. Minimum wage increases may have different effects on different types of workers. One of the study’s recent findings is that, based on a group of 14 000 low-paid workers in Seattle who earned less than the new minimum wage before it was implemented, experienced workers saw gains from the minimum wage increases, while non-experienced workers saw no change (Jardim et al., 2018[14]; Jardim et al., 2018[15]). More specifically, workers with above median experience saw their wages increase by an average of USD 251 per quarter, while less experienced workers saw little to no average change. The minimum wage increases also reduced the number of low-wage labour market opportunities, with fewer new entrants into the labour market and reduced turnover rates in low-wage jobs.
Source: University of Washington (n.d.[16]).
The higher education system
In a system with broad institutional autonomy, the Washington Student Achievement Council is responsible for strategic oversight of higher education in the state
The Washington Student Achievement Council (WSAC) serves as a co-ordinating body for higher education in Washington. Its predecessor, the Washington Higher Education Coordinating Board (HECB), was created by the Washington State Legislature in 1985 and abolished by the Legislature in 2012. A fundamental change with the establishment of WSAC in 2012 was the removal of programme approval authority. The agency has responsibility for strategic oversight and compliance; authorisation of private and out-of-state degree-granting institutions; as well as the administration of state financial aid, college access programmes, approval of veteran’s benefits, and transfer agreements.
In the bill proposing the creation of WSAC, the legislation states: “It is the intent of the legislature to create the student achievement council to provide the focus and propose the goals for increasing educational attainment including improving student transitions from secondary to post-secondary education and training and between and among post-secondary institutions. Due to the large and growing gap between education requirements and achievement, it is the intent of the legislature to focus on increased educational attainment as a key priority and to closely track progress towards meeting this statewide objective” (Washington Legislature, 2012, pp. 2-3[17]). Thus, WSAC is responsible for establishing state-wide goals for educational attainment and collaborates with its partner agencies to develop strategies and policy recommendations to present to the Legislature in order to advance the state’s post-secondary attainment goals. However, the agency does not have institutional budget authority. WSAC is overseen by an executive director and five citizens (one of whom must be a student) appointed by the Governor, and one representative each from the four-year public institutions, two-year public colleges, K-12 school system, and independent higher education institutions.
The State Board for Community and Technical Colleges (SBCTC) is a key collaborative partner with WSAC in the post-secondary landscape, advocating for policies and budget recommendations that will make progress towards the state’s attainment goals. The SBCTC serves as the governing board responsible for co-ordinating and directing the state’s system of 34 community and technical colleges. Individual colleges receive their state funding through the SBCTC, and allocations are determined by a general funding formula. The SBCTC is overseen by a board consisting of nine members, appointed by the Governor.
In Washington, public four-year colleges and universities enjoy a substantial level of autonomy. In general, they are responsible for programme approval, staffing, admissions and quality assurance. The Degree-Granting Institutions Act of 1979 requires that all private and out-of-state institutions obtain authorisation from WSAC to operate in the state, unless they are exempt or participating in the State Authorization Reciprocity Agreement. Authorised institutions must renew their approval every two years. The governance of public four-year institutions in Washington is shared between the Governor, WSAC and the institutions. The members of each institution’s governing board – the Board of Regents or the Board of Trustees – are appointed by the Governor, in accordance with the Revised Codes of Washington.
Agencies and stakeholders across education and workforce policy environments in Washington partner together to reach state-wide goals
In addition to the WSAC and the SBCTC, the main stakeholders in higher education policy include representative bodies of the different higher education providers. The Independent Colleges of Washington (ICW) is the representative body of ten private, not-for-profit institutions, and the Council of Presidents represents public baccalaureate institutions. WSAC also convenes advisory committees for informing policy recommendations and strategy, involving students, faculty and citizens, as well as stakeholders from business and industry.
WSAC collaborates with partner agencies, such as the Workforce Training and Education Coordinating Board (WTECB), the science, technology, engineering and mathematics (STEM) Education Innovation Alliance, and the Washington State Apprenticeship and Training Council, to develop strategies to meet state-wide goals. The WTECB is a state agency collaborating with labour, business and government leaders, aiming to link higher education to Washington’s workers and industry needs. The WTECB serves as the state’s Board of Vocational Education and develops policies about how Career and Technical Education (CTE) is delivered across the state. It also monitors the state’s workforce system and oversees private career schools. Workforce development policy at the state level is also the primary vehicle for implementing the federal Workforce Innovation and Opportunity Act of 2014 (WIOA). The programme is administered by Washington State Employment Security Department, and overseen at the regional and local level by 12 regional Workforce Development Councils across the state.
The STEM Education Innovation Alliance is an organisation established by the Legislature in 2013, focused on improving STEM (science, technology, engineering and mathematics) education in Washington. It brings together leaders from business, non-profit and government organisations, and advises WSAC on how to better align its strategies with the STEM framework for education and accountability developed by the alliance.
The primary responsibility for establishing policies for steering the public higher education system in Washington rests with the Legislature, based on recommendations from executive agencies and non-profit partners. Washington’s state Legislature plays a prominent role in supporting the alignment between higher education and labour market needs. In 2019, the Legislature passed a monumental bill to increase state investments to enhance and facilitate labour market alignment. Key initiatives are outlined in Box 7.2 and discussed further in Section 7.3.
Box 7.2. The Washington Education Investment Act
The goal of the Washington Education Investment Act (House Bill 2158), which passed in April 2019, is to implement a system to enhance investment in career-connected learning and workforce education, and to improve access to post-secondary education. Notably, the legislation establishes the Workforce Education Investment Account in the state treasury, primarily to support higher education programmes and financial aid programmes, and creates the Workforce Education Investment Accountability and Oversight Board. The Board provides guidance and recommendations to the Legislature on what workforce education priorities should be funded, and monitors how these funds are increasing student success and career readiness.
Key initiatives include:
creation of the Washington College Grant Program, which extends the eligibility criteria and the maximum college grant for full tuition and partial tuition scholarships;
targeted investments in high-demand fields, such as computer sciences, engineering, health care, and information technology;
expansion of the Guided Pathways Program to better align education in community and technical colleges (CTCs) to the labour market;
creation of a state-wide, career connected learning system (Career Connect Washington), an initiative launched by the Governor and advanced by a broad spectrum of state partners, facilitating connections between industry and education.
Source: Washington Legislature (2019[18]).
Washington’s higher education landscape is characterised by a diversity of institutions, including a large number of community and technical colleges
The institutional landscape in Washington includes a wide range of private and public higher education institutions. As of 2018, 85% of students in Washington were enrolled in public institutions, 12% were enrolled in private, not-for-profit institutions, and the remaining 3% in private, for-profit institutions. The proportion of students enrolled in each type of institution has remained relatively constant since 2003 (NCES, 2019[19]).
Figure 7.3 shows enrolment trends for all first-time, full-time students over a 15-year period across different institution types in Washington. Because many students at public two-year institutions are part-time students, enrolment numbers for full-time equivalent (FTE) students are substantially lower than total headcount numbers. The trend lines show that enrolments at all four types of institutions increased during the recession of 2008-09, and though the rate of growth has declined since then, enrolment numbers have remained higher than pre-recession levels. Enrolments at public four-year institutions have continued to grow post-recession, while enrolments at public two-year institutions declined sharply after the recession but have gradually been increasing. As a proportion of the population, however, the share of individuals enrolled in post-secondary education is substantially lower in Washington compared to other states. In 2017, only 34% of 18-24 year-olds in Washington were enrolled in post-secondary education, compared to the US average of 42% (Lumina Foundation, 2018[20]). This will be discussed further in Section 7.2.
Figure 7.3. Fall higher education enrolment in Washington, 2003-18
Note: Data for 2018 is provisional.
Source: NCES (2019[19]), Integrated Post-secondary Education Data System (database), https://nces.ed.gov/ipeds/use-the-data.
Table 7.2 provides an overview of the higher education institutions operating in the state. The Degree-Granting Institutions Act of 1979 requires that all private and out-of-state institutions obtain authorisation from WSAC to operate in the state, unless they are exempt or participating in the State Authorization Reciprocity Agreement (SARA). Authorised institutions must renew their approval every two years. Table 7.3 provides a profile of public higher education institutions in the state.
Table 7.2. Accredited higher education institutions certified to operate in Washington
Note: Does not include out-of-state higher education institutions operating in Washington.
Sources: WSAC (2020[21]), Colleges and institutions in Washington, https://wsac.wa.gov; NCES (2019[19]), Integrated Post-secondary Education Data System (database), https://nces.ed.gov/ipeds/use-the-data.
Public baccalaureate colleges and universities
Four-year institutions are those that offer at least a bachelor’s degree. This category of higher education institutions includes research universities, comprehensive universities and colleges that offer post-secondary education (associate’s degrees, bachelor’s degrees, master’s degrees and doctoral degrees). The majority of degrees awarded at public four-year institutions are bachelor’s degrees, accounting for about 75% of all degrees awarded. Four-year institutions may also award certificates at lower qualification levels, but do so infrequently.
There are six public baccalaureate colleges and universities in the state of Washington, of which two are research universities and four are comprehensive universities. The University of Washington-Seattle campus is the largest public university in Washington with respect to its student population. In fall 2018, the University of Washington enrolled 43 980 full-time equivalent (FTE) students. The second biggest public university is Washington State University, where 28 552 FTE students were enrolled in fall 2018. Western Washington University has the third biggest student population, with 15 216 FTE students enrolled in fall 2018.
Community and technical colleges
Community and technical colleges (CTCs) offer post-secondary education primarily at International Standard Classification of Education (ISCED) levels 4 and 5. They award associate’s degrees and short- and long-term certificates, and offer apprenticeship training programmes, as well as worker re-training and basic skills training. Of the 34 community and technical colleges in Washington, 29 colleges also offer applied bachelor’s degrees (ISCED level 6).
The associate’s degree normally requires two years of full-time college work and is designed either to prepare individuals for a career, as part of a technical career education programme, or to pursue a bachelor’s degree. About 39% of public baccalaureate graduates in Washington started at a community or technical college (SBCTC, 2019[22]). There are three types of associate’s degree programmes in Washington: the technical associate’s degree, the transfer associate’s degree, and the transfer technical associate’s degree. The technical associate’s degree is offered in more applied fields of study such as accounting, law enforcement administration, child care assistance and registered nursing. The transfer associate’s degree is offered in a wide range of fields of study and provides bachelor credit for students to transfer to a four-year college. The transfer-technical associate’s degree prepares students to pursue education toward an applied bachelor’s degree. On average, transfer students make up about 40% of enrolment in community and technical colleges in Washington.
About 46% of students in community and technical colleges are enrolled in workforce training programmes, also known as Career and Technical Education (CTE), which encompass not only the technical associate’s degree but also professional-technical certificates. Workforce training programmes are often designed specifically to meet local industry needs. Short-term certificate programmes typically last from six months to one year, but they are usually designed to build on top of each other and lead to a longer-term certificate.
An open admissions policy is in place in the public two-year sector. In the 2018/19 academic year, the total student population of community and technical colleges was 362 862 (or 169 652 in FTE), which represents about 58% of all students enrolled in public higher education institutions. The largest community college in terms of student population is Bellevue College, with 27 706 (or 12 107 FTE) students enrolled in 2018, followed by Spokane Community College, with 21 929 students enrolled in 2018. Overall, enrolment in technical and community colleges has been declining since 2010.
Private four-year institutions
There is no comprehensive overview of private higher education institutions in Washington, as only institutions that participate in federal or state student aid programmes are required to submit information to public authorities. Most students enrolled in private baccalaureate institutions are enrolled in one of the colleges of the Independent Colleges of Washington (ICW). On average, ICW’s colleges award 20% of the baccalaureate degrees awarded in the state. The largest private, not-for-profit institution is Gonzaga University, which enrolled 6 501 students in fall 2018. The largest for-profit institution is Charter College, with 2 853 students enrolled in fall 2018. Most of the for-profit and not-for-profit private institutions enrol a relatively small proportion of students in Washington. Of the 6 private four-year for-profit institutions that provide data to the Integrated Post-secondary Education Data System (IPEDS), 4 enrolled less than 100 students in FTE in fall 2018. And 8 of the 19 four-year non-for-profit enrolled less than 1 000 FTE students in fall 2018.
Table 7.3. Profile of public higher education institutions in Washington
Note: Data are from the 2018/19 academic year.
Sources: SBCTC (n.d.[23]), Washington State Board for Community and Technical Colleges, https://www.sbctc.edu; ERDC (2019[24]), Statewide Public Four-Year Dashboard, https://erdc.wa.gov/data-dashboards.
7.2. Assessment of labour market outcomes: The alignment between supply and demand of graduate skills in Washington
Alignment of supply and demand
Responding to shortages in medium- and high-skill occupations is a widespread concern and a focus of state efforts
Across OECD countries, technological change and globalisation have profoundly affected the nature of jobs performed by workers and, in turn, the skills demanded by employers. As routine tasks have become easier to offshore or automate, the number of routine-based jobs traditionally held by workers with lower education levels has fallen. By contrast, the demand for workers with high levels of skills who can perform non-routine tasks and adapt to changing work environments has increased (OECD, 2019[25]; OECD, 2017[26]), consequently increasing the demand for post-secondary educated workers.
Nationally, estimates have suggested that by 2020 approximately 35% of all job openings will require at least a bachelor ’s degree and about 30% at least some college or an associate’s degree (Carnevale, Smith and Strohl, 2013[27]). Employment projections conducted in Washington for the period 2020-25 are in line with these national estimates. About 66% of all job openings in Washington over this period are projected to require at a least one year or more of post-secondary training. Of these, about half will require “mid-level skills”. The state defines mid-level skills as those conveyed by apprenticeships, one year or more of post-secondary education, a training certification or an associate’s degree (WSAC, SBCTC and WTECB, 2018[8]).
To understand the extent to which the state is prepared to meet the demand for post-secondary educated workers, state agencies have developed projections of supply and demand at different skill levels, and across the state’s occupational sectors. These projections are available on a public dashboard maintained by the SBCTC and are published in the “Skilled and Educated Workforce” summary report every other year. The latest edition of this report suggests that the demand for workers with some post-secondary education is expected to exceed the supply of graduates at this level by approximately 10 000 workers annually between 2020 and 2025. The annual gap is expected to be 7 000 at the bachelor’s level over the same period. The gap is smaller at the graduate level, but significant in certain fields such as computer science (WSAC, SBCTC and WTECB, 2018[8]).
Washington’s supply and demand analysis also permits the identification of “high demand fields”. These fields are occupational groupings mapped to broad fields of study. Occupational groups are considered to be in high demand when the gap between the supply of graduates and projected annual openings is equal to or exceeds 15% of the total number of projected annual openings. As seen in Figure 7.4, eight fields were in high demand at the mid-skill level, and seven at the bachelor’s level, in 2017. Key fields in high demand across all levels (including the graduate level) include human and protective services, educators, and computer and information science.
It is important to note that these projections have some limitations: new and emerging industries may not be captured, degree completions may capture workers who upgrade skills in their current jobs but are not available to fill new openings, and data lacks on whether workers in fact have the right level of skills for their jobs. Supply data, which combine past degree completion and current graduate labour force participation patterns, may also not fully reflect new dynamics in higher education enrolments and completions. However, these projections offer a useful picture of where the main gaps exist.
The state can help address the gap between the supply and the demand for post-secondary educated workers in several ways, including producing graduates in the state of Washington or recruiting workers with post-secondary education from other states or countries.
Figure 7.4. Projected gaps in the supply and demand of post-secondary graduates
Source: WSAC, SBCTC and WTECB (2018[8]), A Skilled and Educated Workforce, 2017 Update (figures 6 and 7), https://wsac.wa.gov/sites/default/files/2017.ASkilledAndEducatedWorkforce.pdf.
The production of post-secondary credentials in Washington in response to labour market demand has been strong. There have been steady increases in the number of post-secondary degrees completed in computer science, engineering, and other STEM and health fields, particularly at the bachelor’s level. In 2017, 28% of bachelor’s degrees awarded at Washington’s public and private institutions were in STEM subjects, up from 22% in 2012 (Washington State STEM Education Innovation Alliance, 2019[28]). At the bachelor’s level, most of the growth in credentials awarded by public institutions has taken place in STEM or other in-demand fields, as shown in the top panel of Figure 7.5.
At the sub-baccalaureate level, there has been an increase in the credentials awarded by public colleges in information technology and STEM subjects, but a decrease in nursing and other healthcare-related fields (see bottom panel). The differences in expected returns may play a role: holders of a sub-baccalaureate credential (i.e. apprenticeship, long or short certificate or associate’s degree) in computer science have median close to USD 75 000 annually. By contrast, a graduate in the health sector could expect around USD 42 000 with an associate degree or a long-term certificate, and about USD 38 000 with a short-term certificate (WSAC, SBCTC and WTECB, 2018, p. 8[8]). In that sector, the lower interest of students in sub-baccalaureate credentials may also result from a job market favouring applicants with bachelor’s degrees, especially for high-demand professions such as registered nurses.
Figure 7.5. Trends in the production of degrees in high-demand fields, 2007/08 to 2016/17
Note: High employer demand programmes are identified by the institutions, in consultation with the Workforce Training and Education Coordinating Board and the Washington Student Achievement Council, based on the needs of the state.
Sources: A) Adapted from ERDC (2019[29]) Higher Education Outcomes Dashboard, https://erdc.wa.gov/data-dashboards; B) Adapted from SBCTC (n.d.[23]), Washington State Board for Community and Technical Colleges, https://www.sbctc.edu.
Net in-migration from other states is another response to Washington’s shortage of qualified workers. Between 2011 and 2015, Washington benefitted from high net in-migration of workers from other states, attracting more than 10 000 workers with at least one year of post-secondary education, of which about 15% had a certificate or associate’s degree, 30% had a bachelor’s degree and 55% had a graduate or professional degree. These figures place Washington fourth in overall net in-migration of workers with more than upper secondary education, and third for those with bachelor’s degrees and above (WSAC, SBCTC and WTECB, 2018[8]).
Immigration rates from abroad are also important. While recent data is not available, a 2011 report from Washington’s Workforce Training and Education Coordinating Board indicates that in 2010, Washington had the eighth highest number of H-1B visa petitions in 2010 out of all states. The H-1B visa provides entry to foreign workers employed temporarily in a specialty occupation or field. Federal legislation sets the annual caps, although a number of exceptions apply. Washington’s information technology sector is a large user of H-1B visas to hire skilled workers: in 2010, Microsoft employed 20% of Washington’s H-1B workers and Amazon employed another 9% (WTECB, 2011[9]). Washington also recruits talent from abroad to be educated in Washington institutions. The share of international students completing post-secondary credentials in Washington has grown substantially, from 4.3% to 6.4% of total degrees awarded between 2012 and 2016 (WSAC, 2019[30]). As shown in Figure 7.15, this group also tends to choose fields such as engineering and mathematics, which correspond to a key range of high-demand occupations.
Immigration offers a way to meet employer needs that cannot be met by the domestic supply, but these flows are subject to uncertainties, from changes in immigration policy to competition among states and countries for skilled labour. The domestic production of skills is therefore the main channel for Washington state to meet its labour market needs, while ensuring Washingtonians can enjoy the benefits of the state’s economic growth. However, despite significant state efforts to boost attainment, particularly in high-demand fields such as STEM and health, both labour and skills shortages persist. Labour market shortages depict a situation where an insufficient number of graduates are available to fill available jobs, whereas skills shortages happen when there are enough graduates, but their skills do not match employer needs (LMIC, 2018[31]). Understanding the potential drivers of these shortages can help identify relevant policies and actions that could be considered by state authorities. Two aspects are discussed below: the constraints in the supply of higher education, and the constraints with respect to student demand.
As we will discuss in Section 7.3, Washington institutions are generally responsive and adjust their programmes to changes in student demand, for instance through the development of course concentrations, minors and new programmes to facilitate the acquisition of specific skills that students view as enhancing their employability. However, several types of challenges exist with respect to institutional supply. First, in certain STEM and health fields, a conjunction of factors may constrain the supply of study spaces. The shortage of qualified faculty in fields where the salaries offered in industrial or clinical settings are much higher than those offered by post-secondary institutions is one challenge. The limited number of work-based opportunities for students in fields where a practicum or other type of supervised work is a graduation requirement, such as in many health programmes, is another frequently cited barrier. In addition, the cost of providing certain high-demand programmes requiring special equipment, while seldom discussed during OECD interviews, can also affect the provision of programmes in fields such as engineering or health.
While no quantitative evidence is available on the scope of unmet student demand, stakeholders have reported cases of students waiting to enter in-demand classes by taking other, potentially unrelated credits, until the course they aim to enrol in is made available. As discussed in the policy section, the state has taken steps to address these constraints, through the infusion of funding for in-demand faculty salaries and for infrastructure in in-demand fields to expand capacity. Additional steps that will be discussed in the policy section (Section 7.3), such as expanding the engagement of employers in providing work-based learning opportunities, could further help alleviate these supply constraints.
Student demand constitutes the second part of the equation and appears to be the main driver behind the insufficient supply of graduates in high-demand fields. The factors that underpin insufficient student demand to meet labour market needs are diverse and vary by field of study. In certain cases, the lack of attractiveness of certain sectors or occupations, due to pay or job conditions or other reasons, appears to be a key challenge. In Washington, the low earnings of in-demand professions in the social service sector, such as education or human and protective services, compared to the earnings of other post-secondary graduates, may deter students from these professions. With respect to teaching, this is consistent with nation-wide issues: while American teachers at lower secondary levels have higher starting salaries than on average across OECD countries with available data, a larger share of teachers than on average in OECD countries report increasing teacher salaries as a key priority (OECD, 2018[32]).
In certain fields with high earnings, low student demand appears to have other contributing factors. The low take-up of apprenticeship may result from the lack of emphasis and time spent on career and technical education (CTE) in high school and the complexity of CTE pathways (Office of the Washington State Auditor, 2017[33]). The limited role of apprenticeship in the United States, compared to countries such as Germany or Switzerland, may create a self-reinforcing dynamic: few students who pursue an academic route choose apprenticeship, and apprenticeship is in turn viewed as a less desirable option. In recognition of this issue, the Career Connect Washington initiative described in Section 7.3 of this chapter supports the expansion of apprenticeship, including through a communication strategy to improve perceptions of apprenticeship as a sound pathway to good-paying jobs. The initiative also highlights the value of apprenticeships as a route to occupations beyond the trades, such as healthcare and information technology, and as a track combining practical experience and classroom learning that can be part of a higher education pathway to associate’s or bachelor’s degrees.
In high-earning fields that require programmes of study at the associate’s, bachelor’s or advanced graduate levels, a first challenge resides in Washington’s particularly high and fast-growing demand. While still below 5% of total employment, employment in information and communications technology (ICT)-related sectors is already twice as large in Washington as it is in the United States on average. It is projected to be one of the three fastest growing sectors in the state, whereas it will decline slightly on average in the United States (ESD, 2019[2]). Filling jobs in the information technology sector, and in other advanced STEM-related occupations, appears limited by the total pool of students who are willing and able to pursue these fields in the state. As discussed later, women and under-represented minorities tend to access fields of study such as computer science or engineering at relatively low rates.
Skills shortages, on the other hand, call for a better alignment of post-secondary programmes with employer needs. According to Washington employer representatives met during the OECD visit, the amount of time needed to complete a post-secondary programme results in an insufficient number of qualified candidates and candidates whose skills may not be adequately responsive to rapidly changing job needs. Employers’ reported needs for advanced, diverse and updated skillsets within short timeframes challenge the traditional model of higher education. This calls for an increased focus on new ways to embed labour market relevance in post-secondary programmes, including through innovation in the educational offer and stronger partnerships between post-secondary education and labour market stakeholders. The extent to which the Washington system supports these approaches is discussed in Section 7.3.
Overall post-secondary attainment rates are high, but college participation is significantly lower than in leading states
Attaining a post-secondary qualification is no longer the only way to obtain skills, yet it remains a key mechanism to obtain the combination of knowledge, skills and attitudes valued in the labour market. Employer feedback indicates a continued reliance on a completed qualification, while also searching for alternative, often complementary, approaches to assess and hire people for certain skills or profiles (Gallagher, 2018[34]). Boosting the post-secondary education attainment rate can thus play an important role in raising the skill levels in the workforce generally, in addition to addressing specific occupational shortages, as discussed previously.
The state’s workforce is well-educated, with a higher education attainment rate of 48% for the population aged 25-64. However, as seen in Figure 7.6, rates of attainment also vary widely across the state, with an attainment rate of 24% in Yakima compared to 63% in Whitman County.
Figure 7.6. Higher education attainment in Washington, 2013-17 average
Sources: Map: Adapted from WSAC (n.d.[35]), County Maps, https://wsac.wa.gov/college-bound. Attainment rates: U.S. Census Bureau (2018[36]), American Community Survey 5-Year Estimates (2013-17), https://www.census.gov/newsroom/press-kits/2018/acs-5year.html; compiled per county in state reports by Lumina Foundation (2019[6]), A Stronger Nation: Washington Report 2019, http://strongernation.luminafoundation.org/report/2020/#page/downloads.
Current higher education enrolment patterns suggest it will be difficult to reach the state’s target of 70% post-secondary attainment of the population aged 25-44 in 2023. The share of 18-24 year-olds enrolled in degree-granting post-secondary institutions in Washington is low, at 36.7%, compared to 42.5% on average in the United States. Washington state operates programmes such as Running Start that enable youth to complete an associate’s degree at the same time as they complete high school, which may lead some individuals to identify themselves as “not enrolled” if they have previously completed a post-secondary credential. However, when excluding individuals who have at least an associate’s degree, the difference in reported enrolment rates is even larger, at 34.4% in Washington compared to 41.7% in the United States (U.S. Census Bureau, 2019[7])
When looking at a broader age group, Washington’s college-going rate is well below those of states with similarly high attainment rates, at 11.5% of 18-57 year-olds, compared to 19.2% for example in Massachusetts, or 14.7% in Virginia (Lumina Foundation, 2018[20]). In the public post-secondary sector, enrolment growth over the past decade has been modest and concentrated in the four-year institutions, where enrolments grew by about 18% compared to 2007. Enrolments in two-year institutions have stayed the same, only spiking just after the recession of 2008-09. As seen in Figure 7.7, other pathways such as apprenticeship plummeted during the recession and have now only returned to 2007 levels.
Figure 7.7. Annual enrolment in public post-secondary institutions and apprenticeships, 2007-19
Notes: The data are displayed on a single chart to allow for comparison at system level. Data for four-year institutions and apprenticeships refer to annual enrolments (all students enrolled regardless of course load).Data for two-year institutions (all programmes excluding apprenticeships) refer to annual enrolments of full-time equivalent students. More students take part-time loads at two-year public colleges. For reference, total headcount at public two-year institutions (all programmes excluding apprenticeships) was 348 224 in 2018/19.
Sources: Public four-year: ERDC (n.d.[37]), Education Research and Data Center, https://erdc.wa.gov. Public two-year: SBCTC (n.d.[23]), Washington State Board for Community and Technical Colleges, https://www.sbctc.edu. Apprenticeship: Washington State Department of Labor and Industries (n.d.[38]), Washington State Department of Labor and Industries, https://www.lni.wa.gov.
Low enrolments appear to result both from stagnant rates of transition from high school to post-secondary education, and from a lack of progress in the participation of adults in post-secondary education. In 2016, 62% of the 2016 high school graduates had enrolled in post-secondary education a year later, a rate that has remained stable over the past decade. The share of students over the age of 30 enrolled in public four-year institutions has declined slightly since 2007/08, from about 16% of all enrolments to 13.6% in 2016/17. The same trend can be observed in community colleges, where the share of students over the age of 30 went from 29.5% to 26.8% between 2007/08 and 2018/19 (ERDC, 2019[24]; SBCTC, 2019[39]).
These trends suggest that more needs to be done to increase students’ awareness of the various post-secondary pathways available to them, and their motivation to participate. Recent research across the state’s nine educational service districts sheds light on some of the barriers which may limit student participation in post-secondary education (WICHE/WSAC, 2017[40]). These include challenges at the point of transition between high school and post-secondary education, such as uneven access to dual-credit programmes, and the practical limitations facing students who may be interested in Career and Technical Education courses while meeting the graduation requirements, which are largely based on academically-oriented courses. Low completion rates constitute the second aspect of the “leaky pipeline”, which results in lower attainment rates and missed opportunities for students and the Washington economy. Of students who completed high school in 2009, 54% had obtained no degree in 2019, a proportion that is only slightly lower than in 2005 when it was 57% (ERDC, 2019[41]). Low completion rates are of particular concern among under-represented populations. Multiple reasons underpin the slow progress on this front, from insufficient academic preparation, to difficulty in navigating the post-secondary environment, cost constraints (including the opportunity cost of not working), and personal constraints such as work and family. For both access and completion, particular challenges face under-represented populations, which warrant a specific focus, as further discussed in this section.
Ensuring graduates have transferable and durable skills is increasingly important
In addition to increasing the state’s overall higher education attainment rate, it is important to understand the types of skills needed in the economy to support students’ choices of study fields and ensure they develop skills relevant to the labour market throughout their higher education programmes. As the tasks demanded of workers undergo rapid changes across and within occupations, it becomes increasingly important to understand the skills that employers demand and whether higher education institutions are able to provide these skills effectively.
Analysis conducted by Washington’s Employment Security Department combines employment projections by occupation and information on skills demand from online job postings to convert employment projections into “hard skills” projections (ESD, 2019, p. 121[2]). This analysis aims to support the connection between education and training with tactual skills demanded by employers, rather than with generic occupational definitions. The analysis reveals that the top six skills based on projected openings in the state and across the twelve Workforce Development Areas include: food preparation, bilingual, forklifts, mathematics, quality assurance and freight+, representing together more than 15% of job openings.
While ICT jobs still represent a small share of current and projected openings, the skills projected to experience the most growth across the state all pertain to ICT. Ranked by a combined average of projected annual growth rates over 2016-26 and total average annual openings, the top 10 growing skills are Java, JavaScript, C#, C/C++, web services, Linux, agile software development, Python and big data. The analysis further reveals that ICT skills are also widely demanded outside of ICT occupations. The report finds that out of a total of 633 occupations converted to skills state-wide, ICT skills are present in 583 occupations. For 238 of these occupations, ICT skills comprise more than one-quarter of total numbers and for 86, they comprise more than one-half of total numbers (ESD, 2019[2]).
Table 7.4 highlights the top 15 occupations outside of the ICT sector with the largest demand for ICT skills. Feedback from stakeholders met during the OECD team’s visit corroborated the widespread demand for digital skills across industry sectors, noting, for example, in the Yakima Valley the increasing requirement for workers in the agriculture sector to be able to operate new machines that require a degree of computer literacy (e.g. programming of drones). Further, the acquisition of certain skills that are not primarily ICT-related, such as quality assurance of lean manufacturing, may also require ICT skills (ESD, 2019[2]).
Online job postings data offer promising ways to better understand labour market changes, but include a number of caveats. In particular, employer behaviours and intentions are an important factor. Research has shown that skills explicitly named in job postings may not necessarily be the only skills required, and are often those which are typically uncommon in the occupation or hard to find in general.
As technologies and work practices are changing fast, specific skills, including those that are ICT-related and in high demand today, may quickly become obsolete. Various meta-cognitive, cognitive and socio-emotional skills may thus become more important to help workers continuously learn and adapt to new technologies and new working methods. In Washington, a recent survey, as part of a study of the Washington Student Achievement Council and the Western Interstate Commission on Higher Education, asked employers about their skills needs and hiring experiences. Based on responses from 190 employers across all counties, socio-emotional skills (or, “soft skills”), particularly better communication, interpersonal skills and work habits, were among the most frequently cited as needed and lacking in graduates from all educational levels (WICHE/WSAC, 2017[40]).
Table 7.4. Top 15 occupations not primarily computer related with largest shares of computer skill requirements
Notes: Washington state, Q2 2017 occupational estimations (June 2014 to May 2017 sample, skills/occupations matrices). Each included occupation’s vector of skill numbers was normalized (i.e. scaled) to totals of one.
Source: ESD (2019[2]), 2018 Labor Market and Economic Report, https://esd.wa.gov/labormarketinfo/report-library.
A range of factors may explain the strong demand for both ICT and socio-emotional skills in Washington. Regarding ICT, rapid changes in technology and prerequisites (e.g. quantitative reasoning capability) to acquire these skills may constrain the supply of individuals with these skills. While post-secondary programs in computer science provide these skills, they may not be widely accessible to students in other fields. The gap in socio-emotional skills may be influenced by other factors. These may include challenges in reliably identifying and measuring social and emotional skills; although research is growing in this area, and an international survey of social and emotional skills is under development (OECD, 2019[42]). Another issue relates to how socio-emotional skills may be taught at the post-secondary level and in the workplace. The recent work of the National Commission for Social, Emotional and Academic Development provides various recommendations for embedding these skills through K-12 levels of education, and more broadly in the lives of youth. At the post-secondary level, stakeholders met in Washington indicated that developing social and emotional skills for the world of work is best done in work-based learning experiences, as further discussed in Section 7.3.
Returns by level and field of study
Pursuing post-secondary education provides individuals with a wide range of benefits, which go well beyond labour market outcomes. International evidence shows that having completed post-secondary education is associated with higher levels of skills and better employment, as well as better health and increased civic participation (OECD, 2013[43]; OECD, 2016[44]). Obtaining good jobs and rewarding careers is of key importance to students who choose to pursue post-secondary education (NSSE, 2018[45]). As discussed in Chapter 2, a large body of research shows that the type of post-secondary programme pursued has a strong impact on labour market outcomes, alongside factors such as graduates’ occupation and demographic characteristics, and broader economic conditions. The next section focuses on the link between levels and fields of study and employment and earnings in Washington.
Higher levels of study generally yield higher employment and earnings in Washington, though apprenticeships provide strong returns to graduates
In Washington, as elsewhere in the United States and across the OECD, the likelihood of participating in the labour force and being employed increases with each level of education. In 2018, 75.2% of Washingtonians aged 25-34 with a high school diploma were employed in 2018, notably above the US average (71.6%). This figure was 77.5% for those with some college but no degree, 79.9% for associate’s degree holders, and 87% for bachelor’s degree holders. This places Washington around the US average for bachelor’s degree holders, but well below it for individuals who have completed some post-secondary courses but no degree (79.1%), or who have earned an associate’s degree (84.1%) (U.S. Census Bureau, 2019[7]).
Completing higher education also brings, on average, significant earnings benefits. Generally, the wage premium associated with completing post-secondary education increases with each level of education. At the undergraduate level, for people aged 25-34, the differences in median earnings between graduates with an associate’s or a bachelor’s degree are important, more so in Washington than on average in the United States. The annual wage premium for completing an associate’s degree compared to a high school diploma in Washington was USD 4 000 in 2018, whereas it was USD 7 900 on average in the United States. By contrast, the annual wage premium for completing a bachelor’s degree compared to a high school diploma reached USD 24 000, compared to USD 20 000 on average in the United States (U.S. Census Bureau, 2019[7]); see Chapter 3).
The state of Washington collects and publishes various types of data on graduate outcomes, as summarised in Table 7.6. The Washington State Education Research and Data Center (ERDC) provides several dashboards that allow for comparisons of student outcomes several years after they complete post-secondary education. The High School Graduate Outcomes dashboard provides information on high school graduates for 2-12 years after they completed high school. These data, provided in Figure 7.8, show the advantage of students at higher levels of study, but also show that the earnings of students who have completed an apprenticeship can be superior to those of graduates with advanced degrees. Despite this earning advantage, there were just below 20 000 active apprentices in 2019, of which close to 85% were in construction trades (WSATC, 2019[46]).
Earnings differences between associate’s and bachelor’s degree holders tends to grow over time. Data from the High School Graduate Outcomes dashboard suggests that, four years after high school graduation, graduates with a bachelor’s degree earned on average 21% more than their peers with an associate’s degree, who had already been in the workforce for one or two years. 12 years after high school graduation, bachelor’s degree holders earned 32% more than associate’s degree holders (ERDC, 2019[41]).
Figure 7.8. Annual earnings of graduates 1 to 12 years after high school graduation
Source: Adapted from ERDC (2019[41]), High School Graduate Outcomes Dashboard, https://erdc.wa.gov/data-dashboards/high-school-graduate-outcomes.
These patterns are, for the most part, in line with those observed in the United States as a whole, where the premium for completing post-secondary education has grown significantly since the 1980s, particularly at higher levels of study (Oreopoulos and Petronijevic, 2013[47]; Baum, 2014[48]). Several factors underpin this evolution. Part of it results from global skill-biased technological change and specific features of the United States’ labour market, tax and social systems, discussed in Chapter 2. Part of it results from the specificities of the innovation-driven Washington economy, where the need for advanced skills exacerbates the higher returns observed for higher levels of study.
At the other side of the spectrum, however, the higher-than-average median wages of upper secondary graduates in Washington dampen the premium associated with shorter programmes such as certificates and associates. For the 25-34 year-old population, the median annual earnings of upper secondary graduates was USD 36 000 compared to USD 31 000 on average in the United States in 2018 (U.S. Census Bureau, 2019[7]). This may be a transitory phenomenon linked to Washington’s booming post-recession economy, which has led to a surge in jobs requiring upper secondary education, for instance in construction. These higher earnings of upper secondary graduates may be a factor behind the challenge in increasing the college-going rate in Washington.
Factors such as labour market concentration may also be at play. Where employers have larger market power, the demand for skills has been found to increase, particularly for social, emotional and organisational skills, with a larger effect on low-skilled occupations (Hershbein and Macaluso, 2018[49]). This is of particular relevance in Washington, which is home to large employers across a variety of economic sectors, ranging from aerospace to agriculture/food manufacturing and information technology. In addition, while firms employing more than 500 people represent 0.5% of all firms in the state, they represented close to half of all employment in the state in 2015, and experienced strong employment growth between 2010 and 2015 (US SBA Office of Advocacy, 2018[50]).
The high earnings of graduates from apprenticeship programmes are particularly striking. They may relate to ongoing changes in the nature of apprenticeship pathways in the state, which are gradually moving from mostly traditional construction trades to trades in high-earning sectors, such as ICT, aerospace and health (WSATC, 2019[46]). On the one hand, this high premium for labour market relevant programmes with direct applicability in high-demand occupations aligns with research in other states (Schneider, 2015[51]). On the other hand, international research suggests that returns to job-specific training can be high in the initial years of a career, but decline over time as the skills learnt in specific training may not be well adapted to changing tasks (Hanushek et al., 2017[52]). The data shown above suggest that the while the earnings of apprenticeship graduates flatten 10 years after high school graduation, they remain notably higher than for post-secondary certificates and degrees.
The cost of higher education and debt burden is relatively low in Washington
Assessing the cost of higher education is the other part of the equation to understand to what extent post-secondary education is worth the investment. In this area, Washington performs relatively well compared to other states, in two respects. First, Washington resorts less to tuition fees to fund higher education than on average in the country, with net tuition representing a little over 40% of total educational revenue in 2018 compared to 46.6% on average in the United States. The increase in the net tuition revenue per full-time equivalent student has been small (1.7%) over the past five years, compared to an increase of 10.2% on average across the United States. This is in a context where total educational revenue per full-time equivalent student, while still below the US average, is rising significantly thanks to state investments (+8.3% since the recession, compared to a US average of +6.4% (SHEEO, 2019[53])).
Second, Washington is a state with comparatively low debt burdens. In 2018, graduates had an average debt load of USD 23 524, placing the state 44th in the distribution which ranged from USD 38 669to USD 19 728. About; 48% of students graduate with debt, compared to a range from 76% to 36% in other states (TICAS, 2019[54]). Large investments in student aid over the past decade, and particularly through the 2019 Washington budget, discussed later in this chapter, are helping to reduce the upfront cost of attending higher education.
However, a recent study on student financial aid in Washington suggests that the share of the post-secondary-related costs covered by student aid, and the form of that aid (e.g. grant, subsidised and unsubsidised loans), vary substantially according to the type of programme pursued. Two key findings from this study are that students in shorter and less expensive courses of study, such as associate’s degrees, often face an “unmet need” (costs not covered by financial aid from all sources) that is greater than that faced by students pursuing bachelor’s degrees, and that all students incur some debt, including non-completers (ERDC, 2018[55]). In addition, while the debt loads of students pursuing a bachelor degree are unsurprisingly higher than those pursuing shorter credentials, the difference is relatively small and may be insufficient to notably enhance the return on investment for students in shorter degrees. To better understand the financial barriers faced by specific student groups, information on debt loads disaggregated by demographic characteristics such as race and ethnicity would be helpful, as outlined in the chapter’s recommendations on information (Section 7.5).
Graduates in STEM fields enjoy particularly high labour market returns in Washington
Employment rates vary by field of study, with a spread of over 10 percentage points. Fields of study with higher employment rates also tend to be associated with higher earnings. While these patterns are consistent with the US average, they are more pronounced in Washington with respect to low-earning fields. As Figure 7.9 (Panel A) shows, in 2018, graduates from industrial arts, consumer services and recreation (a diverse category ranging from middle-skills technology programmes to art/entertainment to nutrition or retailing) and health had employment rates close to 80%, which is notably lower than the national average. Graduates from programmes that command high earnings, such as architecture and engineering, computer science, mathematics and statistics, or business, but also communications and journalism, enjoyed employment rates very close to 85%, consistent with the national average.
As shown in Panel B of Figure 7.9, differences in earnings by fields of study are significant, and greater in Washington than in the US on average. For the population aged 25-64, the earning advantage of a bachelor’s graduate compared to an upper secondary graduate (the higher education premium) ranges from 18.4% for education graduates to 136.8% for architecture and engineering graduates on average in the United States. In Washington, the earning premium ranges from 12.6% in education to 154.5% in computers, statistics and mathematics. The earning premium for architecture and engineering and health are notably higher than in the three other states involved in this OECD study (U.S. Census Bureau, 2019[7]).
Figure 7.9. Employment and earnings of bachelor’s graduates aged 25-64, by key field of study, 2018
Note: The estimated median annual pre-tax earnings refer to full-time full-year wage and salary workers, are expressed in current USD, and are not seasonally adjusted (U.S. Bureau of Labor Statistics definition).
Source: Adapted from U.S. Census Bureau (2019[7]), American Community Survey 2018 (database), https://www.census.gov/programs-surveys/acs/data.html.
Data from Washington’s Earnings for Graduates dashboard permit the exploration of graduates’ earnings by field of study nine years after graduation. These data suggest that earnings grow in the first few years after graduation in all fields, but the extent of this growth varies across fields and levels of study. For instance, at the bachelor’s level, graduates from computer science, engineering, and humanities see an increase in their earnings of 79%, 63% and 73%, respectively, between their first and ninth year after graduation (ERDC, 2019[41]). However, due to low starting salaries, humanities graduates still earn about half the median wage of engineering graduates nine years after graduation. By contrast, for fields of study leading to regulated occupations in sectors such as health and education, earnings grow much less over time. Between the first and the ninth year after graduation, earnings increase by 25.6% in health professions and related programmes, and by 41.2% in education. However, it is important to keep in mind that health graduates enjoy higher starting salaries than education graduates, as shown in Figure 7.10.
Figure 7.10. Earnings trajectory of bachelor’s graduates, selected fields
Notes: Earnings are adjusted to Q4 2015 using the Chain-Weight Implicit Price Deflator (IPD) for Personal Consumption Expenditures. Earnings data are displayed for individuals who work all four quarters in a calendar year, and whose annual earnings are at least USD 14 000 (nominal dollars).
Source: Adapted from ERDC (2019[41]), Higher Education Outcomes Dashboard, https://erdc.wa.gov/data-dashboards.
These fields of study differences are consistent with national patterns, and are underpinned by a range of factors. One key factor relates to the occupational choices of graduates; in many cases, a college major conditions graduates’ future occupations, and occupations are in turn strong determinants of earnings (Altonji, Blom and Meghir, 2012[56]; Carnevale et al., 2017[57]). The earning differentials between fields also appear to have grown over the past twenty years, as technological change has increased the market value of abstract tasks and decreased that of routine tasks (Altonji, Kahn and Speer, 2014[58]). Research suggests that these changes have particularly benefitted occupations in STEM and, more broadly, fields of study that emphasise quantitative skills, including business, economics and finance (Schneider, 2015[51]; Hershbein and Kearney, 2014[59]). While national, these findings are of particular relevance to Washington’s economy.
The economic and policy environment in the United States and Washington state also contributes to earning differentials by field. In general, income dispersion is greater in the United States than in many OECD countries. Wage-setting mechanisms in some sectors underpin the problem of “high-demand low-earning” majors such as education or human services. During the OECD visit, representatives of post-secondary institutions explained their challenge as employers of faculty in certain high-demand fields such as nursing, as they have to compete with the wages practicing nurses can earn in a clinical setting.
Within-field variation is wide in Washington, and greater in general fields of study without direct linkage to highly standardised/regulated occupations
Graduates from the same field of study can also experience very different labour market outcomes (Urban Institute, 2019[60]). Washington data show such within-field dispersion as in Figure 7.11. Compared to other states in this study, the within-field dispersion is particularly large (U.S. Census Bureau, 2019[7]). Large spreads are seen in fields of study with loose connections to occupations, such as business and social sciences, but also in computer science and engineering, which suggests that there is great diversity in the types of occupations in which these graduates work. The dispersion is less important in education or health.
Figure 7.11. Distribution of earnings of 25-64 year-old bachelor’s graduates, 2018
Notes: The estimated median earnings refer to full-time, full-year wage and salary workers, are expressed in current dollars, and are not seasonally adjusted (U.S. Bureau of Labor Statistics definition). The label "industrial arts, consumer services, and recreation" from the Census corresponds to "middle skills technology programs and jobs".
Source: Adapted from U.S. Census Bureau (2019[7]), American Community Survey 2018 (database), https://www.census.gov/programs-surveys/acs/data.html.
Differences in earnings within fields of study result from a host of different factors. Part of these differences may be due to the wide array of occupations that graduates may work in, which are very often not related to their major (Schanzenbach, Nunn and Nantz, 2017[61]). These variations in occupations are to be expected particularly in general fields of study, which are not closely connected to a clearly defined occupational path. These variations may also be linked to the type of company graduates work for and the tasks they perform. The question of whether graduates are employed in jobs that require the level of skills acquired in post-secondary education is particularly crucial. While there is no Washington-specific data on this topic, international and US-wide evidence suggests that over-qualified graduates earn less than their well-matched peers, and that the wage penalty increases for graduates who are both over-qualified and working outside of their study field (see Chapter 2).
Variation in earnings within fields of study may also result from differences in the quality of the education and skills obtained by graduates, from the self-selection of students with different social networks and skill-base in certain fields, or from employers’ perception of graduates’ education and skills. During the OECD visit, employer representatives reported the institution attended as an important signal of quality. Some graduates may also have complemented their qualification by acquiring supplemental credentials. Indeed, stakeholders met during the visit noted that students in general fields of study such as social sciences and humanities were often keenly aware of the need to obtain certain technical skills. Stakeholders reported that students’ interest in enhancing their skills profile to make it more attractive to employers played a strong role in moving institutions towards new offerings, such as minors or course concentrations in particular subjects (data science was frequently mentioned, for example).
Returns by demographic groups
The previous section has shown that variations in graduate earnings are particularly wide by level and field of study in Washington. This section explores how social inequalities tend to map themselves onto these different labour market outcomes, resulting in a distribution of students by level and field of study that is skewed by gender, income, race and ethnicity. This, in turn, results in lower economic gains from completing post-secondary education for under-represented students compared to other graduates.
There are notable ethnic, racial and gender gaps in outcomes
In Washington, as across the country, post-secondary education graduates enjoy employment and earnings premia compared to high school graduates across all racial and ethnic groups. However, higher education does not eliminate the employment and income gaps that exist in the broader American population, but instead may reinforce them (Carnevale and Strohl, 2013[62]). Research suggests that in countries with a high premium for education, such as the United States, low social mobility is common because educational attainment is passed on through generations (Autor, 2014[63]). Further, the ability of the American educational system to promote social mobility has faded in recent decades; educational achievement at both school and post-secondary levels is increasingly associated with family income (Reardon, 2011[64]; Bailey and Dynarski, 2011[65]).
In Washington, Hispanic and Black/African American graduates aged 25-34 with a bachelor’s degree have slightly higher labour force participation and employment rates than White graduates, whereas the reverse is true on average in the United States. For instance, the employment rate of White bachelor’s degree holders was 87.5% in Washington compared to a US average of 89.3%, while the figure was 89.3% versus 87.6% for Hispanics, and 93.6% versus 88% for Black/African Americans (U.S. Census Bureau, 2019[7]).
With respect to annual median earnings, White graduates with a bachelor’s degree earn more than Hispanic and Black/African American graduates. While in line with national patterns, the difference is more pronounced in Washington, due to higher-than-average earnings of White graduates. As a result, in 2018, there was an earnings gap of USD 10 000 between White and Hispanic workers, compared to USD 4 300 on average in the United States, and a gap of USD 15 000 between White and Black/African Americans, compared to a US average of USD 10 000 (U.S. Census Bureau, 2019[7]), see Chapter 3).
Information presented in Figure 7.12 shows the outcomes of Washington high school graduates two to twelve years after they have completed high school, and distinguishes median earnings of graduates with the three most awarded types of credentials in Washington: certificates, associate’s degrees and bachelor’s degrees. The data suggest that the variation in earnings by ethnic and racial group tends to decrease 12 years after completion for associate’s degree graduates, but persists for both certificate and bachelor’s graduates, where the gap in fact tends to grow over time.
Figure 7.12. Annual earnings in Washington by racial and ethnic groups and level of study, 2017
Source: Adapted from ERDC (2019[41]), High School Graduate Outcomes Dashboard, https://erdc.wa.gov/data-dashboards/high-school-graduate-outcomes.
Gender differences are important in Washington. In 2018, 82.4% of women aged 25-34 with a bachelor’s degree were employed in Washington, a figure lower than the three other states participating in this review and about two percentage points below the national average (84.6%). Since the employment rates of men aged 25-34 with a bachelor’s degree are slightly higher in Washington than on average in the United States, at 91.8% versus 91.2%, this translates into a participation gap of 9.4 percentage points, compared to an US average of 6.6 percentage points. The gender gap in earning for the same group is also more pronounced in Washington than on average in the United States, with an USD 17 000 earnings gap between men and women, compared to a gap of USD 10 000 on average in the United States (U.S. Census Bureau, 2019[7]); see Chapter 3).
Washington data suggest that the gender gap in median earnings exists across the main types of post-secondary credentials awarded in the state. It is greatest at the certificate level on average but tends to converge over time, as the gender gap increases for associate’s and bachelor’s degree holders. This is consistent with previous findings for racial and ethnic gaps: equity gaps are generally greater at higher levels of education and earnings. Yet, while women who hold a certificate earn less than men, it is the only post-secondary credential where women have a greater premium for completing post-secondary education than men (ERDC, 2018[66]). This is likely due to the low earnings of women with a high school diploma, and relatively high earnings of men whose highest attainment is upper secondary education.
Figure 7.13. Earnings differences by gender and level of study
Source: Adapted from ERDC (2019[41]), High School Graduate Outcomes Dashboard, https://erdc.wa.gov/data-dashboards/high-school-graduate-outcomes.
General differences in labour market outcomes by race and ethnicity in the American working-age population result from a variety of factors, including individuals’ educational attainment, occupation and industry, geographic location, as well as discrimination (U.S. Bureau of Labor Statistics, 2019[67]). Among individuals with post-secondary education, many of these factors apply, in addition to key differences in the nature of higher education pursued, namely the level, field and institution of study, as discussed in the next section. Research on the alignment between qualifications and employment also shows that over-qualification is more prevalent among Black/African American and Hispanic graduates than among the general college-educated population (Rose, 2017[68]).
Various challenges help explain gender gaps. Broad issues may contribute to the gender gap in participation and employment, including the shortage of childcare across the state, a problem identified as a barrier to education participation (WICHE/WSAC, 2017[40]). Earnings differences, on the other hand, appear largely driven by the field of study chosen by women in higher education, despite equivalent academic preparedness for high-earning fields at high school level, for example in math and science. However, the smaller gaps among younger generations suggest improvements are underway.
Low participation in programmes leading to high-demand high-paying occupations among under-represented groups contributes to poorer labour market outcomes
Access to higher education in the United States has increased significantly since the 1960s across all racial and ethnic groups (NCES, 2017[69]). However, greater access overall has also been associated with increased polarisation of student populations according to income, race and ethnicity in different types of institutions. Students who are Black or African American, Hispanic or low-income are more concentrated than before in open-access colleges, while students who are White or high-income are increasingly concentrated in selective schools, which have higher per-student spending, completion rates, and lead to higher earnings (Carnevale and Strohl, 2013[62]; Carnevale and Rose, 2003[70]; Chetty et al., 2017[71]). Furthermore, research suggests that over time, while the selectivity of top institutions has increased, the selectivity of middle- and bottom-tier institutions has decreased (Hoxby, 2009[72]). Under-represented students thus enjoy better access overall, but not to institutions leading to the best labour market outcomes.
In Washington, the share of racial and ethnic groups enrolled in post-secondary education reflects roughly their share of the population, with Whites representing a slightly smaller share than their population share (Figure 7.14). Among each of the four largest ethnic and racial groups, only Asian students attend four-year institutions in larger numbers than they do two-year institutions, while roughly half of White students attend four-year institutions. The reverse is true for Hispanic and Black and African-American student groups, in which a majority attend two-year institutions. Enrolment changes in the past five years suggest that enrolment growth is largely concentrated among Hispanic students, whose enrolments in two-year institutions have jumped by more than 20% in four-year institutions and 40% in two-year institutions. White and Black/African American students have experienced an approximately 20% decline in enrolment at two-year institutions. While a smaller group, American Indians have experienced a significant decline in both types of institutions, with a 36% decrease in four-year institutions and a 22% decrease in two-year institutions (not shown on graph).
The share of apprenticeship enrolments, which, as shown earlier, is a high-earning pathway, shows that the large majority of apprentices are White (76% in 2011, 73% in 2015), and a small but growing minority is Hispanic (8.8% to 10.7% over the same period) (WSAC, 2019[30]).
Figure 7.14. Enrolment by race and ethnicity in public institutions, 2015
Note: These data capture only first-time, full-time fall enrolment, and are thus likely to undercount enrolments of part-time students.
Source: Adapted from WSAC (2017[73]), Progress on Postsecondary Enrolments, https://wsac.wa.gov/roadmap/access.
Students from under-represented groups also tend to be over-represented in for-profit private institutions. These institutions combine poorer labour market outcomes than other types of institutions, in some cases negative returns, greater shares of students who carry debt, and larger debt loads than in other post-secondary sectors (NCES, 2018[74]; Chakrabarti and Jiang, 2018[75]; Cellini and Turner, 2018[76]). While, in Washington, the share of students enrolled in for-profit institutions is small and declining (2.5% in 2015), it is worth noting that there are larger shares of under-represented students in these institutions: in 2017, 3.6% of Hispanics, 3.7% of Black/African Americans and 11.3% of American Indians or Alaska Natives were enrolled in a for-profit institution in 2017. By contrast, 1.3% of Asians and 2.5% of White students enrolled in these institutions.
Graduates’ fields of study play a key role in determining graduates’ occupations and earnings, as discussed in the previous section. Using data from the Integrated Post-secondary Education System permits the identification of the share of post-secondary degrees awarded in select fields for various ethnic and racial groups and for both genders in select fields of study. Figure 7.15 shows data for both public and private institutions, and two- and four-year institutions.
Figure 7.15. Degrees awarded in select fields of study by race, ethnicity and gender, 2016-17
Notes: All students (including non-certificate-seeking students, full-time and part-time), first major only. Health professions and related programmes include 35 different types of programmes, including optometry, public health, medicine, dentistry and veterinary medicine.
Source: NCES (2019[19]), Integrated Post-secondary Education Data System (database), https://nces.ed.gov/ipeds/use-the-data.
Figure 7.15 shows that both liberal arts and sciences and health professions and related fields account for between 14% and 20% of awarded degrees for all racial and ethnic groups (except for non-resident alien graduates). Between 10% and 15% of degrees awarded across all groups are in business and related fields (with the exception of international students, for whom 25% of degrees awarded are in business). However, differences can be seen in some fields that command very different earnings. Around 8% of all degrees awarded to Asian and non-resident alien students are in computer and information sciences, a much higher share than for other groups. Similar patterns across groups are observed in engineering. The education field presents the opposite picture: Hispanic, Black or African American and White students tend to choose education more than Asian or international students. The difference by gender, shown in Panel B, shows similar patterns: a larger share of degrees awarded to men are in computer science, engineering and business, whereas greater numbers of women choose health professions, education and liberal arts and science.
Various factors contribute to under-represented students’ lower access to high-earning fields of study. Some relate to students’ subjective choices and preferences, which are shaped by multiple factors including family and peer influences, and their knowledge – or lack thereof – of the outcomes of different types and fields of study (Baker et al., 2017[77]). Research also shows that high-achieving, low-income students are less likely to apply to selective institutions than their peers, despite the availability of financial aid to help them cover costs. This research also suggests that well-targeted, inexpensive interventions, including semi-customised information and simplified application processes can help (Hoxby and Turner, 2013[78]; Hoxby and Avery, 2014[79]). This highlights the importance of well-targeted student supports, as discussed in Section 7.3. Another major challenge is that of student preparedness, which is poorer among under-represented groups.
Low preparedness for higher levels of study and higher debt loads dampen the value of post-secondary education for under-represented groups
Under-represented racial and ethnic minorities not only face poorer labour market outcomes, but they also face particular barriers to accessing quality higher education and to completing the programmes in which they enrol. Regarding general access to higher education in Washington, substantial progress has been made. From 2005-15, the share of students enrolling in post-secondary education in their first year after graduation has improved, from 22% to 31% for Black or African American students, and from 15% to 22% among Hispanics. That share has also improved among White students from 31% to 36%, and among Asian students from 40% to 53%. It has remained low among American Indians or Alaska Natives (16% to 19%) (ERDC, 2019[41]). This progress suggests that Washington’s efforts to remove barriers to access for all, including by improving student aid, are showing results. However, as shown in the previous section, significant efforts are required to help these students access high-earning fields and selective institutions.
Under-represented minorities have low completion rates, which prevents them from benefitting from the employment and earning premia resulting from a completed credential. Washington’s Ten-Year Roadmap (the state’s guiding policy in higher education) dashboard provides completion rates, measured for full-time, first-year freshmen at four-year institutions. While a main drawback of these figures is that they do not take into account transfer students, they allow for comparisons by student group.
In 2015, the completion rate was 68.3% on average for all four-year public institutions, ranging from 72.2% in private not-for-profit institutions, 68.6% in public institutions, and 26.6% in for-profit institutions. Looking at ethnic and racial groups, the rate for all four-year institutions ranged from 49.6% for American Indian students, 50.7% for Black or African American students, 58.9% for Hispanic students, 69.8% for White students and 77.9% for Asian students. The completion rate for Hispanic and Black or African American students at for-profit four-year institutions was respectively 18.6% and 16.7% (WSAC, 2019[30]).
Low academic achievement is a major factor underpinning low access rates (in particular to high-earning fields of study and selective institutions), low completion rates, and overall low returns on investment once the costs of education and debt loads are taken into account (Webber, 2016[80]). In STEM subjects, the state of Washington shows that low-income students and minorities perform below other groups as early as the 3rd grade, with disparities increasing throughout the educational pipeline (Figure 7.16).
Student debt affects all student groups, however it has very different consequences depending on students’ earnings potential and ability to obtain supports to make payments when they need. Research suggests that the growth in default rates has been concentrated among specific groups. These include non-completers as well as graduates with short-term credentials and from institutions with low per-student resources and higher shares of low-income and African American students (Addo, Houle and Simon, 2016[81]; Looney and Yannelis, 2015[82]).
Figure 7.16. STEM performance of children, 2019
Notes: The scores for this test fall on a continuous scale from approximately 2 000 to 3 000 and it changes across grade levels. Based on their score, students fall into one of four categories of performance called achievement level and they are considered to meet the standards if they perform at levels 3 and 4.
Source: Adapted from Washington STEM (n.d.[83]), Talent Supply and Demand Dashboard, https://stem.wa.gov.
With respect to gender gaps in accessing high-earning fields, preparedness is not a main problem. The majority of women enrol in post-secondary education, and complete at higher rates than men, at 70.6% on average in four-year institutions, compared to 65.5% (WSAC, 2019[30]). They also display equivalent academic ability, but tend to opt out from high-earning fields such as STEM as they go through the educational system. This finding echoes that of international research which shows ongoing challenges of self-concept and self-efficacy for young girls in mathematics (OECD, 2016[84]). As a result, a focus early on in education on girls’ interest in a broader range of subjects, including mathematics and science, appears to be a key mechanism to help women access fields of study leading to high-earning careers. A broader range of supports beyond the educational system, such as childcare, is also needed to ensure women can access, and progress in, demanding careers.
7.3. Policies to improve the alignment of the higher education system and the labour market in Washington
The assessment of labour market outcomes in the previous section suggests that Washington faces three main challenges: an insufficient higher education attainment rate to address key labour market shortages, wider earnings differences by fields of study than the national average, and challenges for under-represented populations to reap the benefits of the state’s booming economy.
To respond to these challenges, the state would benefit from focusing on the following five policy areas to improve the alignment of higher education and the labour market:
strategic planning and co-ordination to support alignment between higher education and workforce needs;
funding of higher education to address issues of access, equity and attainment;
educational offerings responsive to labour market needs;
student supports and pathways to promote completion and good labour market outcomes;
targeted information for students, educators and policy makers about educational opportunities and labour market needs to support student choices and guide institutional practices and policy.
This section of the chapter identifies current strengths and areas for improvement in each of these five policy areas, and provides recommendations to help improve the alignment of higher education and the labour market in Washington.
Strategic planning and co-ordination
In Washington’s decentralised higher education system, state authorities set broad policy targets
Washington’s guiding policy in higher education is the 2013 Ten-Year Roadmap, a strategic document produced through a broad stakeholder consultation process across the state, and grounded in legislation (Revised Codes of Washington 28B.77.001). The Roadmap guides state-wide efforts for ten years, focusing on increasing educational attainment in the state, at both secondary and post-secondary levels.
The Roadmap includes two attainment targets to be achieved by 2023: all adults aged 25-44 in Washington should have a high school diploma or equivalent, and at least 70% of Washington adults aged 25-44 should have a post-secondary credential. While no explicit targets relate to the alignment of higher education and the labour market, the Roadmap includes a clear focus on preparing students for the labour market and meeting employer needs. To support progress toward the Roadmap’s goals, the Washington Student Achievement Council (WSAC) adopts strategic frameworks on a biennial basis. These two-year plans outline key challenges and makes policy and funding recommendations to the Governor and the Legislature to advance toward the two attainment goals, as outlined in Box 7.3. WSAC is responsible for publishing information on state-wide progress made to achieve the Roadmap goals, made available publicly through a Roadmap dashboard (WSAC, 2019[30]).
Box 7.3. The 2013 Roadmap Actions and Four Challenges of the 2019-21 Strategic Action Plan
Washington has identified twelve actions in three areas – ensure access, enhance learning, and prepare for future challenges – to support the attainment targets set for 2023. The actions are listed in order by priority within each of the three objectives.
Ensure access:
Ensure cost is not a barrier for low-income students.
Make college affordable.
Ensure all high school graduates are career and college ready.
Coordinate and expand dual-credit and dual-enrolment programmes.
Increase support for all current and prospective students.
Enhance learning:
Align post-secondary programs with employment opportunities.
Provide greater access to work-based learning opportunities.
Encourage adults to earn a post-secondary credential.
Leverage technology to improve student outcomes.
Prepare for future challenges:
Respond to student, employer, and community needs.
Increase awareness of post-secondary opportunities.
Help students and families save for post-secondary education.
The 2019-2021 Strategic Action Plan outlines four challenge areas requiring priority actions to meet the goals of the Roadmap:
Address affordability: Offer multiple pathways that are accessible to students regardless of financial means.
Close opportunity gaps: Confront barriers with support for students under-represented in educational success.
Support regional leaders: Address regional workforce shortages and support efforts to accelerate attainment.
Reengage adult learners: Build a framework to help adults complete post-secondary credentials.
As outlined earlier in the chapter, WSAC regularly convenes secondary and post-secondary institutions and stakeholders to seek input on higher education policy. In particular, representatives from public four-year institutions, public two-year institutions, independent not-for-profit institutions and schools (K-12 level) are members of the Council. WSAC also supports the planning of higher education by working with other state agencies to generate information about labour market needs. In particular, WSAC collaborates with the SBCTC and WTECB to analyse labour market projections and the current higher education supply to identify potential gaps. This work is published through biennial “A Skilled and Educated Workforce” reports that inform the Legislature and stakeholders on sectors facing a need for increased higher education supply.
WSAC has relatively limited policy levers to steer the actions of higher education institutions toward meeting state-wide goals compared to other states in this study. For instance, unlike Virginia and Ohio, WSAC does not have a process of institutional plans that set out how institutions can meet goals that are both specific to their mission and relevant to state-wide policy (see Chapter 3). Unlike the state co-ordinating boards in the three other participating states, WSAC has no role in approving new programmes proposed by four-year public institutions. In the two-year sector, the State Board for Community and Technical Colleges provides general oversight of the college system, allocates state operating and capital funds, and oversees policy development for this sector. The Council also has a role in higher education consumer protection; it approves new degree-granting post-secondary institutions consistent with statutory criteria, and establishes minimum criteria to assess whether students who attend proprietary institutions of higher education shall be eligible for state financial aid.
Washington’s decentralised model of higher education presents certain advantages from the perspective of fostering labour market relevant higher education. Government typically sets broad directions and provides funding, while leaving substantial room for all stakeholders at state and local levels to participate in improving the system’s labour market alignment. Various stakeholders, including institutions, employers, intermediary organisations and others, fill this space by developing innovative solutions to specific problems, such as STEM shortages or low post-secondary participation among under-represented groups. These innovative solutions are often the product of partnerships between stakeholders.
Collaborative partnerships help align higher education and the labour market
In this governance context, partnerships are a primary channel through which stakeholders work to improve the alignment of post-secondary education with labour market needs. For instance, institutions often work together on a regional or local basis to create pathways that are relevant to the particular needs of the area. This type of approach was particularly evident in smaller communities visited by the OECD team, where strong relationships were in place between “feeder” community colleges and their regional university to facilitate the transfer of students. Efforts to prepare students for transfer appeared to be an important factor motivating collaboration, which can be explained by the large and growing share of transfer degrees granted in the state: 67% of all associate degrees granted by public community colleges in 2017/18 were transfer degrees, up from 62% in 2013/14. In addition, the fast development of “major-related program” transfer degrees, which are more closely aligned to bachelor’s programmes than the more generic “direct transfer agreements” (DTA) degrees, is likely to require increased collaboration between two-year and four-year institutions to ensure the alignment of the curriculum.
Washington institutions met during the OECD visit also highlighted various types of partnerships with employers. These often involved joint work on the design and delivery of programmes, with the goal of equipping students with specific skills required by employers, often through the development of targeted programmes (e.g. Microsoft Project Management Certificate). Another example is the creation of an inter-disciplinary innovation hub at Eastern Washington University in partnership with the energy corporation Avista, outlined in Box 7.4.
Box 7.4. Eastern Washington University and Avista Development partnership
The new Catalyst Building in Spokane's University District is planned as part of the partnership between Eastern Washington University (EWU) and Avista Development. This building will feature Eastern Washington University as the primary tenant, opening the doors for EWU to become an innovation hub connecting students to the regional business community.
As the main tenant, EWU will move three programmes from its College of Science, Technology, Engineering and Mathematics (CSTEM) currently offered in Cheney to the Spokane location, namely its computer science, electrical engineering and visual communication design (VCD) programmes. This move will add 50 faculty members and an additional 1 000 students to Spokane, bringing a total of 4 000 EWU students to the Spokane University District. By bringing together students in engineering, computer science and graphic design, this initiative will also promote the development of inter-disciplinary learning and skills among students.
Source: InsideEWU (2018[87]).
WSAC regularly partners with a range of organisations on education and workforce issues, such as the Seattle Metropolitan Chamber of Commerce and the Washington Roundtable. These two industry associations represent leading employers in the state, and work to advance student success and alignment of education and the workforce through affiliate organisations, the Chamber’s Alliance for Education and the Roundtable’s Partnership for Learning.
In addition, several public-private partnerships have developed over the past decade, often as a result of Governor-led initiatives, to address system-wide issues with respect to aligning educational opportunities with the needs of the labour market. The STEM Education Innovation Alliance, created in 2013 and reporting directly to the office of the Governor, brings together leaders from labour, education, government, and non-profit organisations to monitor and publicise developments in STEM education. In particular, the Alliance produces an annual STEM Education Report Card, which provides information on the preparedness of Washington students in STEM disciplines from pre-school to K-12, the supply of graduates in STEM compared to the labour market demand for these graduates, and equity gaps facing under-represented groups in STEM education. The Alliance provides annual recommendations for action to the state Legislature (Washington State STEM Education Innovation Alliance, 2019[28]).
Career Connect Washington (CCW), established in the 2019 Washington Education Investment Act, constitutes a recent example of a public-private partnership that focuses on connecting youth under 29 to jobs by providing career-connected learning opportunities. CCW aims to address the “programme-rich system-poor” nature of the Washington system, through incentivising local-level partnerships among stakeholders to scale up career-connected learning opportunities available to youth. Among its main components, the programme includes a competitive grant programme available for employers and educators to develop regional networks and create or expand programmes that incorporate work-based learning. CCW also provides funding to develop a range of new registered apprenticeships in non-traditional fields such as information technology, health care, and advanced manufacturing, as well as construction. This initiative is further described in Box 7.6.
Two other notable public-private partnerships, the relatively recent Washington State Opportunity Scholarship and long-standing Mathematics, Engineering, Science Achievement (MESA) programme focus on promoting interest in STEM fields, particularly among under-represented groups. These initiatives are largely composed of student supports, and are described in Box 7.8. Finally, a Future of Work Task Force was created through legislation in 2018 to explore how the state should respond to the changing nature of the labour market. Composed of representatives from business, labour and the Legislature, the Task Force’s purpose is to provide recommendations to the Legislature and Governor on how to help workers and employers across the state thrive in a context characterised by rapid technological change, environmental and security issues, and global interdependence. The Task Force has been asked to review a series of mechanisms that are directly relevant to post-secondary education. These include the development of collaborative applied research between institutions and businesses, a focus on the labour market relevance of teaching and learning, and the development of a skills development pipeline that allows all Washingtonians to engage in lifelong learning through portable and cost-efficient credentials (Papadakis, 2018[88]). While such effort is promising, its results will need to be co-ordinated with other initiatives underway.
At the local level, many non-profit organisations lead collaborative efforts to address economic and social barriers to participating and completing post-secondary education. For instance, the United Way of Thurston County launched an Education to Financial Stability Task Force in 2019 with a range of public, private and other non-profit partners to advance a legislative and policy agenda to remove barriers to education for young people, in a county that faces a combination of skills gaps and high levels of poverty.
The lack of a well-identified co-ordination and accountability mechanism limits the state’s progress
However, decentralised decision-making has the drawback of increasing the responsibility of each actor in the system to take action and to co-operate effectively with others. This does not always occur in the absence of a clear line of accountability, and can limit effectiveness in meeting key objectives such as increasing post-secondary attainment or improving the quality and labour market relevance of higher education (Payne and Roberts, 2008[89]; McGuinness, 2016[90]). In Washington, limited co-ordination may be a contributing factor to several challenges, including overall insufficient participation in post-secondary education, limited student mobility across the system and re-entry of adults into the system, and gaps in the rapid deployment of new or expanded post-secondary opportunities to meet labour market needs.
First, part of the skills shortages observed in Washington may result from inefficiencies in the state’s “skills pipeline”, from K-12 to post-secondary education. Career and technical education (CTE) in particular is an area where misalignment between the actions of different stakeholders can undermine the goal of strengthening and expanding labour market relevant pathways for students who may not pursue bachelor’s level education. A recent State Auditor’s report on CTE highlighted four areas of focus to improve the quality and take-up of these opportunities. One is to improve student and family awareness of CTE options. All others focus on improving co-ordination between stakeholders, namely between state agencies, between educational institutions at the secondary and post-secondary level, and between institutions and employers (Office of the Washington State Auditor, 2017[33]).
Mechanisms exist that could facilitate student preparation and transition between secondary and post-secondary institutions, such as dual credits. However, these mechanisms are not systematically in place and are not always well co-ordinated with the regular operations of high schools. In a regional educational assessment from 2017, dual credit options were found to be unevenly distributed across the state. Moreover, in schools that offer dual credit, stakeholders reported that the focus of staff and resources on dual credit and academic preparation could take away from other programming (WICHE/WSAC, 2017[40]). Competing policy objectives are thus apparent: in a constrained resource environment, efforts to boost students’ access to college through intensive academic preparation may detract from ensuring an equal focus on the quality of alternative pathways after high school.
Co-ordination between higher education institutions and employers was another key challenge noted during the OECD visit. Institutions reported difficulty in securing meaningful and sustained employer engagement on colleges’ advisory boards. The challenge in engaging employers is further indicated by the low employer response rate to a recent ad hoc survey conducted as part of Washington’s research on regional needs assessment. The survey was sent to 5 128 employers across the state and 190 responses were received, at a 4% response rate (WICHE/WSAC, 2017[40]). This contrasts with experiences of other countries, such as Australia or the United Kingdom, that secure high response rates to annual surveys with a focus on employers’ skills needs, which in turn is an important tool to shape post-secondary policy and supply (see Chapter 3). Examples of employers actively sharing information about their skills needs in Washington, such as through the Health Workforce Sentinel Network, appeared promising but infrequent. This topic is further discussed in Section 7.3.
Limited co-ordination can also create heightened competition between institutions, which may undermine the educational supply, in quantity or quality, in some areas of the state. Distance to institutions is a major factor affecting decisions to attend college and the choice of programme, particularly among first-generation and disadvantaged students (Garza and Fullerton, 2018[91]; Turley, 2009[92]). Stakeholders met throughout the OECD visit in central and eastern Washington expressed concerns about institutional competition for limited funding, and the approach to distributing this funding. A problem raised by some stakeholders focused on the mechanism through which institutions advocate for funding. This approach, which appears to rely mostly on direct communication between institutions and state legislators, or (in some cases) through collective communication via umbrella bodies for each sub-sector, was perceived to provide a recurring advantage to high-ranking institutions compared to regional institutions serving local labour market needs and with larger shares of disadvantaged students. As will be further discussed, despite a shift of state funding towards colleges and regional institutions, the overall decreasing funding levels continue to pose challenges for institutions that cannot rely on high levels of tuition. The combination of lower institutional revenue and higher shares of disadvantaged students can exacerbate inequities.
Some countries have implemented mechanisms to help government steer the provision of higher education. These tools are often utilised to help balance competing priorities, such as the geographic accessibility of a range of quality post-secondary options, along with the promotion of excellence in teaching and research. These tools range from institutional self-assessments to mutually agreed metrics to which funding consequences are attached. Ireland provides an example of an approach based on dialogue between government and institutions. This approach, which involves the definition of “compacts” between government and each institution, is described in Box 3.3 in Chapter 3.
Recommendations for strategic planning and co-ordination
1. Monitor progress against the state-wide metrics set out in the Career Connect Washington initiative. The definition of career-connected initiatives should be clear, standardised and used by all stakeholders. Reporting of these metrics should be state-wide and regional.
2. Request public higher education institutions and employers benefitting from state support to report on the supply of labour market relevant education and career-connected learning to identify and address gaps. Institutions could report on the share of students engaged in career-connected learning, by level and field of education and student demographics.
3. Employers who benefit from tax credits and over a certain revenue size could report on their contribution to labour market relevant education and career-connected learning. Metrics of interest include, for example: the number of career-connected learning opportunities provided to students; the share of workers by age group and demographic benefitting from company support in undertaking up-skilling activities; and ways in which the company may be engaged in skills advisory councils of local higher education institutions or otherwise engaging with higher education institutions on skills needs.
4. Consider the development of a large-scale employer survey that requests information on a periodic basis about skills gaps and recruitment challenges, satisfaction with graduate skills, employee training, practices to support labour market relevant education provision, and practices that would help government and others engage with employers. Best practices and international experience in employer survey administration to generate good response rates from diverse employer groups should be considered (e.g. United Kingdom and Australia employer skills surveys, see Chapter 3).This would complement the proposed graduate outcomes survey (see recommendations on information).
5. Enhance employer representation on key planning bodies. This includes representation from employers of various business sizes, sectors and geographic areas on the WSAC Board and the CCW networks.
6. Consider establishing a process to assist the Washington State Legislature in assessing the extent to which the post-secondary system supports state-wide, regional and local labour market needs. This process could take the form of compacts, in which public higher education institutions outline institutional missions and highlight progress towards: i) the institution’s stated mission; ii) state-wide objectives such as those stated in the WSAC Roadmap and Strategic Action Plan, the 2019 Workforce and Education Investment Act, and the Career Connect Washington initiative; and iii) regional and local needs.
7. Continue to improve existing data systems to complement the institutional agreements/compacts with a set of metrics pertaining to the institution. This would include information on participation and completion, career-connected practices and outcomes, and labour market outcomes. A number of metrics of interest that are currently missing are included in recommendations on information.
Funding
Recent state investments are promising steps to improve post-secondary participation and graduate outcomes and meet labour market needs
Funding to support institutions and intermediary organisations
Post-secondary education funding in Washington has two key strengths: a strong commitment to accessibility, which helps remove financial barriers to participation, and a growing focus on providing work-based learning opportunities to students, a practice which has been shown to improve students’ transition to the workplace (Comyn and Brewer, 2018[93]).
Annual state appropriations to institutions represent the main category of expenditure in post-secondary education, ahead of student financial assistance. In 2019, the state of Washington spent about USD 2 billion annually on public higher education institutions in 2019, a 17% increase since 2000. As shown in Chapter 3, state appropriations in Washington have fallen more than in other states after the recession of 2008-09, but have increased more than in other states in recent years. Total state funding in 2019 was close to, but not yet reaching, pre-crisis levels. At the same time, significant tuition increases since 2009 have allowed total funding levels to remain stable and even grow over time, most notably in the four-year sector. This regular funding through annual appropriations is not connected to labour market needs.
In addition to regular funding, institutions receive ad hoc investments that respond to particular needs. The Workforce Education Investment Act (WEIA) 2019, contains a series of provisions that infuse funding to institutions, specifically to address labour market needs. For instance, it commits over USD 40 million over two years to increase high-demand programme faculty salaries, including but not limited to nursing educators, other health-related professions, information technology, computer science, and trades, including welding. These investments have the benefit of being rapid responses to critical issues, but can run the risk of not addressing broader funding challenges discussed in the next section.
The state of Washington also channels funds to stakeholders whose work can contribute to a better alignment of the educational supply and labour market needs. Funding has been provided to various public-private partnerships that aim to alleviate the shortage of STEM graduates and increase the engagement of under-represented students in these fields. The endorsement and funding of the Career Connect Washington initiative is a prominent example of such an approach, which recognises that aligning the supply and demand of skills relies in part on the actions of diverse stakeholders at the local level. The creation and funding of regional networks, led by organisations such as regional workforce boards, chambers of commerce or educational service districts, may help expand the quantity of career-connected opportunities available and help raise interest in career and technical education.
Student financial aid
Investments in student aid have been substantial and growing. In 2015, Washington was one of only four states, alongside California, New Jersey and Wyoming, that spent more than USD 4 000 per low-income student, exceeding the federal expenditure on Pell Grants for their state (Eaton et al., 2019[94]). This focus on supporting low-income students is likely to be a main contributor to Washington’s good position with respect to student debt, as one of the ten states with lowest student debt (TICAS, 2018[95]). The State Need Grant (SNG), which preceded the Washington College Grant until 2019, represented an investment of USD 324 million in 2018, a 138% increase since 2003 (Bania, Burley and Pennucci, 2013[96]). Despite this investment, an important share of eligible students on income criteria were not receiving the award due to funding constraints.
The recent Washington Education Investment Act (WEIA), passed in 2019, addresses the SNG’s limitations by converting it into the new Washington College Grant, described in Box 7.5. The Washington College Grant expands eligibility to students, for instance by supporting those in registered apprenticeships, and by raising the income eligibility threshold to cover students from middle-income families in addition to low-income students. The Grant also increases the maximum award to cover full tuition and fees. To address the previous backlog of eligible students due to funding constraints, the Grant becomes an entitlement programme starting in academic year 2020/21, which means that all eligible students are guaranteed to receive funding.
Box 7.5. The Washington College Grant
The Washington College Grant, introduced in 2019 through the Washington Education Workforce Investment Act, replaces the State Need Grant as Washington’s main state financial aid programme. As the state's most extensive financial aid programme, the State Need Grant served over 70 000 low-income students each year. However, funding limitations have meant that not all eligible students received grants (at the time the grant was introduced, an estimated 18 000 eligible students could not be served.)
The 2019/20 academic year serves as a transition year to implement the Washington College Grant. Grant funding will not yet be guaranteed, but with increased funding, the programme will serve an additional one-third of the remaining unserved students, so approximately 6 000 additional students. In addition, the maximum award amounts for public colleges and universities will increase to cover full tuition and fees.
Starting in the academic year 2020-21, key features of the Washington College Grant will include:
Planned investments: USD 199 million will be allocated over the 2020-2021 biennium to the Washington College Grant. This will fund: the backlog of eligible students who did not receive a grant previously due to funding limitations; the increase of the maximum award to cover full tuition and fees; grants and expansion to apprenticeship programs; and the expansion of the income eligibility threshold. Starting in the academic year 2020/21, grant funding will be guaranteed for all eligible students. General funds would be used should the funds planned in the WEIA be insufficient.
Income eligibility: all students at or below median family income (MFI), which is currently USD 91 766 for a family of four, will be eligible. Students with family incomes up to 55% of the MFI will qualify for full awards (the maximum set for their institution type), while students with family incomes between 56% and 100% MFI will qualify for prorated partial awards. Previously, students qualified for the State Need Grant if their family income was at or below 70% of the state's MFI, which is USD 61 500 for a family of four.
Programme eligibility: all students in eligible institutions, which include public two- and four-year colleges and universities, and many accredited private/independent colleges, universities and career schools. The grant can be used towards bachelor’s and associate’s degrees, vocational certificates, and registered apprenticeships. Students enrolled full-time or part-time are both eligible.
Maximum awards: the grant will cover full tuition and fees at any approved/eligible in-state public college or university, and comparable amount towards tuition and other education-related costs at an approved private college or career training programme.
Source: WSAC (n.d.[97]); information provided by the Washington Student Achievement Council to the OECD team on 30 September 2019.
To support the large investments committed through the WEIA, Washington has developed an innovative funding approach calling on the contribution of large firms in need of highly-skilled workers. While most revenues supporting WEIA expenditure will come from the state’s general fund, a surcharge to the business and operations tax will be applied to certain industries including advanced computing businesses, representing about 21% of the total funding. The funding provided through the surcharge will be deposited in a dedicated Workforce Education Investment Account, rather than in the general state fund, and will be overseen by the Workforce Education Investment Accountability and Oversight Board. This approach aims to ensure the funds are used as intended and will allow for progress to be tracked against a set of relevant metrics. However, the creation of this new entity will require strong co-ordination with the existing bodies that play a role in the realms of secondary and post-secondary education as well as employment, including WSAC, SBCTC, WTECB, the Department of Labour and Industries’ Apprenticeship and Training Council (ATC), and the Office of the Superintendent of Public Instruction (OSPI).
Washington is also investing in specific programmes targeting students facing significant economic challenges. Examples of recent policy initiatives include the assistance for college students programme (2SHB 1893). In this effort, WSAC is working with partners in the Department of Social and Health Services and SBCTC to implement a multi-pronged strategy to increase basic needs supports for college students. This includes increasing college students' access to emergency assistance through a new grant pilot programme to community and technical colleges; increasing college students' eligibility for the US Department of Agriculture’s Supplemental Nutrition Assistance Programme (USDA SNAP) (known as Basic Food programme in Washington), increasing college students' access to SNAP benefits via electronic benefits transfer (EBT) card use on campus, through USDA waivers and support of campus USDA applications, and increasing communication with all college students receiving financial aid about possible eligibility for public benefits and steps to apply.
Another example is the Homeless College Students pilot programme (2SSB 5800). Implemented by WSAC and SBCTC, the pilot programme includes funding to six community and technical colleges to create programmes to support homeless and housing-insecure students, and conducts a needs assessment for food and housing insecurity across participating colleges. This is expected to provide participating institutions and the state authorities with key data for future improvements and policy development. This programme is complement by a state-wide learning community on homelessness in post-secondary education for pilot institutions and volunteer colleges over 2019-21. The learning community aims to provide resources and technical assistance, connect institutions with agencies and community-based organisations, facilitate the co-ordination of efforts, and support the development of legislative recommendations.
State funding to institutions could be used more effectively to boost quality at community colleges and encourage labour market relevance across all fields
Funding levels
Washington’s post-secondary education funding landscape also faces important challenges. Low per-student funding in the two-year sector is a particular challenge, given that community college students are more often low-income and less academically prepared than students in the four-year sector (Musu-Gillette et al., 2017[98]; AACC, 2019[99]). Another challenge relates to the allocation of public funding: the main channels through which the state funds post-secondary education, namely annual institutional appropriations and the Washington College Grant, do not take into account students’ labour market outcomes. While this policy choice may not create issues for a large part of institutions and students, risks exist for students who face poor outcomes and yet incur important costs to attend post-secondary education.
Total funding levels have slightly increased over the past two decades. In 2019, state funds per full-time equivalent student in public post-secondary education, including both four-year and two-year institutions, were slightly above the 2000 level (USD 8 569 versus USD 8 316 in constant 2019 dollars). As Figure 7.17 shows, state investments directed to community colleges have stayed stable, but they have significantly decreased for four-year institutions. Four-year institutions have, however, been able to compensate through much greater rises in tuition fees, thus achieving a total revenue per full-time equivalent student that is twice as large on average among four-year institutions compared to community colleges.
Figure 7.17. Per-student expenditure, state appropriations and tuition fees, 2000-19
Notes: Actual state-funded FTE, in 2019 constant dollars. State funds include Stimulus FY 2010, Opportunity Express in 2011, Opportunity Pathways since 2011.
Source: Adapted from the Legislation Evaluation and Accountability Programme (LEAP) Office (2020[100]), Washington State Fiscal Information, http://fiscal.wa.gov/OtherResources.aspx.
Overall, and despite tuition increases, expenditure by student in Washington remains lower than on average in the United States. While total educational revenue per full-time equivalent student in public higher education has increased by 8.3% in Washington since the recession, versus a US average of 6.4%, it remains below average at USD 12 403 in 2018 constant dollars, versus USD 14 556 on average in the United States. Despite experiencing strong economic growth in recent years, Washington spends less on higher education per capita than the national average. This is noteworthy when compared to other states with large public higher education sectors, higher-than-average participation rates, and innovation-driven economies such as New York or California (SHEEO, 2019[53]).
The 2019 WEIA recognises the particular challenges faced by community colleges, which have limited ways to raise funds through either tuition or private donations. The legislation provides an infusion of funding to support regular operating costs as well as employee compensation, programme enhancements, student services and general quality enhancements (close to USD 28 million over fiscal years 2019-21). It also provides USD 32 million over 2019-21 to support the implementation of the Guided Pathways programme, a promising programme that aims to help students identify their career goals and design their educational pathway accordingly. The programme is discussed in the student support section of the chapter.
However, the scale of this new funding, which the SBCTC will distribute among the 34 public colleges, may fall short to achieve substantial quality improvements. There are several reasons to continue to increase funding in the community college sector. The level of per-student resources is highly correlated with student outcomes (Carnevale and Strohl, 2013[62]; Goolsbee, Hubbard and Ganz, 2019[101]). Further, recent research suggests that increasing per-student funding to institutions to support quality improvements has a strong causal effect on increasing enrolments and completion, whereas lowering tuition was found to be insignificant (Deming and Walters, 2017[102]). Moreover, employer representatives met during the OECD visit suggested that quality is more uneven among community colleges than it is among four-year institutions, a perception that is supported by recent national research on college productivity. Indeed, across the country, the cost-benefit ratio of higher education is generally lower among open-access colleges compared to selective institutions, but it is also more inconsistent, even after controlling for students’ aptitudes upon entry (Hoxby, 2018[103]). Third, community colleges constitute an existing infrastructure for labour market relevant education that is worth leveraging (Goolsbee, Hubbard and Ganz, 2019[101]). Community colleges have good territorial coverage, are often an entry point to further study for under-represented groups and adults in need of up-skilling than four-year institutions, and tend to deliver better outcomes than private for-profit institutions (Cellini and Turner, 2018[76]).
Funding allocation
Besides funding levels, the method to allocate funding to institutions is an important public policy tool to support a better alignment between higher education and the labour market. As a policy tool, institutional funding presents advantages compared to channelling funding through student aid, in two main ways. It can place a focus on funding labour market relevant programmes, whereas student aid can increase access, but not necessarily access to labour market relevant programmes. It can also avoid the risk that institutions increase tuition fees or decrease institutional aid as a result of increases in state financial aid (Goolsbee, Hubbard and Ganz, 2019[101]).
In Washington, appropriations to both two- and four-year institutions are made through a base-plus method. A formula also applies to two-year institutions. In the four-year sector, appropriations are made directly by the Legislature to four-year institutions. In the two-year sector, funding is appropriated to the SBCTC, which then allocates funding to community and technical colleges through a funding formula.
Despite a strong focus on the provision of career-connected learning in the state, there is no linkage between regular state appropriations to institutions and labour market outcomes. This can be a challenge, as some high-demand fields can be costly to deliver. Institutions with more constrained resources and who are rewarded by metrics other than labour market outcomes (e.g. enrolments or completions) may have limited offerings of higher-cost, higher-earning programmes, such as healthcare or information technology (Holzer, 2015[104]). The link between public funding and performance has developed in a range of countries, with states like Ohio, Tennessee and Texas having models that attach a substantial share of institutional funding to meeting key metrics, including labour market outcomes (Minaya and Scott-Clayton, 2017[105]; Dougherty and Reddy, 2013[106]). Examples of such models are presented in Chapter 3 of the report.
In Washington, performance funding is in place in the college sector through the Student Achievement Initiative (SAI) established in 2007. Through the SAI, the SBCTC allocates about 5% of state funding based on performance metrics linked to credential completion and student retention. A recent evaluation found that the model has not improved overall completion rates, but has increased the production of short-term certificates in the years following the implementation of the SAI. This unintended effect suggests that institutions are responsive to performance funding schemes, and that there may be other factors at play that drive completion and retention, such as the need for sufficient resources and capacity to improve student success (Hillman, Tandberg and Fryar, 2015[107]). These findings have two implications that merit closer attention: first, the SAI may need to be accompanied with additional investments in the quality of student learning and student supports. Second, there is value in considering a broader range of outcome metrics than just completion and retention. These could include labour market outcomes (both upon graduation and over time), job stability, and measures that take into account the lower earnings of “social service” jobs such as those in the public sector (Minaya and Scott-Clayton, 2017[105]).
No performance funding applies in the four-year sector. While labour market outcomes of graduates from four-year institutions are generally good, the assessment provided in this chapter shows wide variation by field of study. A first step in encouraging focus on labour market relevance for all students may consist of providing more easily accessible information on earnings by programmes (see recommendations for information). Another step could be requesting institutions to provide information on their efforts to expand career-connected learning (see recommendations for strategic planning and co-ordination).
A large amount of public funds is also channelled through student financial aid. The main goal of student aid is to improve accessibility to higher education and to allow students to choose the types of institutions, levels and fields of study that suit best their preferences and abilities. However, given the growing amount of public funds utilised for student aid, caution should be exercised to ensure that the greater number of students who may choose to go to higher education are protected against the risk of poor quality programmes that could leave students with a combination of debt and low earnings. While the risk of accumulating debt is relatively low, given that much of Washington’s student aid approach is based on grants, it is still a concern, particularly among vulnerable students, given the indirect costs of higher education (among others, living, transportation, childcare and lost wages).
Recommendations on funding
1. Continue efforts to increase annual funding to community and technical colleges to: (i) invest in quality instruction and continue scaling up funding for Guided Pathways and other evidence-based practices to improve students’ completion of high-quality, labour market relevant credentials; (ii) continue raising faculty salaries in particular in shortage fields; and (iii) invest in faculty professional development to strengthen teaching of labour market relevant skills. Increased state funding should be accompanied by reporting of colleges on graduate labour market outcomes, in line with recommendation 7 in strategic planning and co-ordination.
2. Consider the inclusion of labour market related metrics in the Student Achievement Initiative. These could include employment and earnings, as well as employment in social service occupations, and unemployment rates, alongside current retention and completions metrics.
3. Consider establishing state “rapid response” funding to institutions to address short-term labour market needs, including supporting the development of career-connected learning opportunities. These funds should be allocated based on local/regional labour market needs and institutional strengths. The proposed institutional compacts (recommendation 6 in strategic planning and co-ordination) could facilitate decisions on how these funds should be allocated.
4. Consider establishing accountability requirements for institutions with large shares of Washington College Grant-supported students (over a threshold to be determined by the state). These institutions could be required to disclose information on debt load and labour market outcomes for graduates. Thresholds could be determined that would motivate ineligibility for institutions that fall under a certain standard of debt-to-outcome ratio.
5. Consider financial incentives for completion targeted to students identified as at risk of dropping out, combined with academic supports and counselling (see also recommendations on student supports).
6. Simplify the various state and federal financial supports available to disadvantaged adults, from social benefits to work-related benefits under the Workforce Investment and Opportunity Act to help adults participate in post-secondary education, in line with the state’s Adult Reengagement initiative (see also recommendations on student supports).
Educational offerings
Washington’s post-secondary education system is comprehensive, and institutions pay increasing attention to labour market relevance
State initiatives
Ensuring a sufficient supply of post-secondary programmes across the state and improving access and completion rates are both key to helping the state meet its labour market needs. As discussed previously, the state and employers have several options to ensure sufficient numbers of post-secondary graduates are available to fill jobs in the economy. They can produce graduates through Washington institutions, or attract graduates from other states or countries. The different routes to supplying graduates have drawbacks and benefits, as highlighted in Table 7.5. Taking into consideration the goal to provide good employment opportunities to Washingtonians and the volatility of migration flows, boosting the domestic production of graduates is a policy priority in Washington.
Table 7.5. Three ways to increase the supply of graduate skills
Washington generally has a large range of post-secondary opportunities available to students. While stakeholders met during the OECD visit noted some shortages of study spaces during the OECD visit, these appeared to be well identified and limited to specific in-demand fields, such as nursing, computer science and education. In these fields, stakeholders identified faculty shortages as an important issue, due to the competitive salaries that qualified professionals can obtain in industry or clinical settings. In some programmes, nursing again in particular, the shortage of clinical positions for students to complete required programme components also limits the capacity to meet student demand. In other cases, study at a certain level is not possible in all areas of the state. For example, stakeholders reported that education doctorates are often not available in regional public institutions, despite being in high-demand among place-bound individuals.
These challenges appeared to be taken into account by state policy, with targeted infusion of funding to increase faculty salaries, and new approaches to develop learning opportunities outside of traditional post-secondary programmes, including through online delivery and community-based learning. For instance, the Professional Educator Standards Board (PESB) has received public funding to develop alternative routes to certification targeting non-teaching staff in the educational system and individuals outside of the sector who want to change careers. These alternative routes are partnerships between approved teacher preparation programmes, school districts and other organisations that aim to provide shorter and more affordable routes to certification and could contribute to alleviating teacher shortages.
Besides ensuring a sufficient supply of higher education, co-ordinating boards in some states use the process of approving new programmes for which public institutions require funding to assess whether the proposed programmes will help address current and future labour market needs, as discussed in Chapter 3. In Washington, the Higher Education Coordination Board in place from 1985 to 2012 had the authority to review new programme funding proposals submitted by institutions to the Legislature. However, some stakeholders have described this exercise as limited to reducing overlaps in offerings, which resulted in unnecessary delays in programme approvals. This function was discontinued when WSAC was created.
However, Washington’s current policy focus on career-connected learning presents an opportunity to boost the development of labour market relevant programmes, within and outside of post-secondary education. In 2016, Washington was one of six states competitively selected to receive funding as part of the National Governors’ Association (NGA) Policy Academy on Scaling Work-Based Learning. The Policy Academy, supported by funding from the Siemens Foundation, has focused on assisting states in scaling high-quality, work-based learning programmes for youth and young adults in STEM-intensive industries such as advanced manufacturing, healthcare, information technology, and energy. Washington continues to participate in the Policy Academy, now in its third phase, as a mentor state. The state’s participation in this initiative was an important catalyst in developing Career Connect Washington, an initiative to significantly expand the number of youth who participate in career exploration, career preparation and career launch programmes. The initiative also aims to induce career-oriented thinking earlier in a young person’s pathway and to change the negative perceptions associated with vocational routes (Box 7.6).
Apprenticeship is a model of particular interest in Washington. The state is engaged in expansion strategies, including through making apprentices eligible for the Washington College Grant and making funding available to institutions and stakeholders through Career Connect Washington (Box 7.6). The state’s goal is to double enrolments from about 20 000 active apprenticeships in 2018, and to diversify both the profiles of apprentices and the sectors where apprenticeship can be pursued. A much-cited example of a well-functioning programme is Apprenti, also described in Box 7.6. Stakeholders repeatedly described the programme as meeting industry needs within a compressed timeframe, while providing a significant earning boost to participants.
Box 7.6. Improving labour market relevance of post-secondary pathways in Washington
Career Connect Washington
The Career Connect Washington programme aims to significantly expand the scale of career-connected learning opportunities in the state through a system-wide approach. The programme stems from work conducted between 2017 and 2019 by the Career Connect Task Force, convened by the Governor and composed of leaders from business, labour, government, non-profit organisations and educational institutions. The Task Force was charged with reviewing existing career-connected learning opportunities in the state and recommending approaches to expand their provision. These opportunities include the following, at both secondary and post-secondary level:
career exploration programmes, such as career fairs or courses proposing work-based problem solving;
career preparation programmes, which include short internships or concentration of vocational courses in secondary education (“Career and Technical Education (CTE) concentrators”);
career launch programmes, such as registered apprenticeship and programmes requiring work-based learning in two- and four-year institutions.
The Task Force identified the existence of many quality career-connected learning opportunities in the state, but also the need to expand their scale significantly through a system-wide approach. As a result, the Career Connect Washington (CCW) was created and obtained funding through the Washington Workforce Education Investment Act 2019.The Act calls for:
cross-sector co-ordination through a cross-agency work group across the state;
resources to K-12 and higher education partners to support enrolment in career launch and registered apprenticeship programmes, as well as other career-connected learning opportunities;
regional leadership and co-ordination to facilitate connections between industry and education;
creation of a grant programme tailored to the local needs of students and employers, and designed for students to receive dual credit; this includes supporting career-connected learning programme intermediaries working within and across regions.
The programme aims to achieve ambitious targets, including that 100% of high school students in the class of 2030 participate in career exploration or career preparation activities, and that 60% of the class of 2030 participate in a career launch programme. The initiative aims to track participation metrics by sub-group (e.g. region, industry and demographic).
The programme is supported by close to USD 40 million in 2019-21. The funding supports the creation of new career-connected learning opportunities through competitive funding allocated to programme intermediaries, regional networks and education district co-ordinators; increased enrolment in existing career-connected programmes; supports for low-income students and those in underserved areas to participate, including for transportation; as well as start-up and capital funding.
As part of CCW, funding has been allocated to the development of new registered apprenticeships in non-traditional fields such as information technology (USD 2 million), health care (USD 1.6 million), and advanced manufacturing. In addition, USD 1.5 million has been dedicated for a regional pre-apprenticeship pathways pilot programme in the Marysville School District, USD 0.9 million for expansion of state apprenticeship staffing, and USD 0.7 million for controls apprenticeship pathways in the South Kitsap School District.
Apprenti
Apprenti is an initiative of the Washington Technology Industry Association (WTIA) created to address the technology talent shortage in Washington State, particularly in the Greater Seattle Area. With a first cohort starting in 2017, the programme now operates nationally at around 50 companies (many of which are major employers) and expects to produce more than 700 graduates in 2019. The Apprenti model aims to help under-represented groups, including minorities, women and veterans, gain training, certification and placement in the tech industry. The model involves a competency assessment and a series of features distinguishing it from traditional internships, which are common in the United States.
The programme reports positive results: 75% of completers were hired by the company they had an apprenticeship with, or by another company in the industry. Participants in the first cohort are reported to have experienced significant income growth; the median income of entrants was USD 28 000 annually, the starting salary in the Apprenti programme was USD 45 000 during training, rising to USD 51 000 after 6 months. Apprenti graduates hired full-time are reported to earn at least USD 75 000.
Sources: Apprenti (n.d.[108]), Career Connect Washington (2019[109]), Washington Legislature (2019[18]).
Institutional initiatives
Representatives from public institutions met during the OECD visit were actively working to develop new ways for students to acquire labour market relevant skills. They reported doing so through various means, from the creation of new minors and certificates that aim to be “add-ons” complementing programmes, to the development of new degree types and better linkages between post-secondary education and alternative pathways such as apprenticeship.
In recent years, CTCs have worked to develop new types of programmes responding to both student and labour market needs. The growing provision of applied bachelor degree programmes (referred to as AB or Bachelor of Applied Science (BAS) programmes) is an example of this. Currently, 27 out of the 34 public CTCs in the state offer these types of degrees. While enrolments in these programmes represent less than 3% of total enrolments, their growth has been substantial over the past decade, from less than 100 in 2007 to close to 3 500 full-time equivalent students in 2017, with good earning outcomes (SBCTC, 2017[110]).
In the four-year sector, institutions respond to growing student demand for stackable credentials with a large number of minors and short certificates of 15 credits (five classes), in areas as diverse as data science, professional writing or global leadership. Both sectors reported various partnership approaches to support the development of collaborative programmes. In less densely populated areas of the state with fewer institutions, both universities and colleges reported collaborating to deliver new and/or in-demand programmes. An example provided was the physician assistant programme delivered in partnership between the Pacific Northwest University and Heritage University.
Expanding teaching practices that convey labour market relevant skills and stronger employer engagement is needed
Embedding labour market relevance across all study programmes
Despite the strengths of its system, Washington’s efforts to improve the labour market relevance of post-secondary education have limitations. While institutions met during the OECD visit acknowledged the importance of offering labour market relevant education, the extent to which such focus translated in academic content and teaching practices appeared to vary widely by institution, programme, course and faculty member. In addition, the creation of new credentials meeting employer needs appeared challenging, given employers’ expectations for rapid provision of labour market relevant skills on the one hand, and the complex programme design and approval processes in higher education on the other.
The US model of higher education has a long-standing tradition of utilising methods such as problem-based learning that have been shown to encourage the acquisition of transferable social and behavioural skills valued in today’s labour market, such as critical thinking, team work and problem solving (Hoidn and Kärkkäinen, 2014[111]). At the national level, the 2018 Faculty Survey of Student Engagement showed that approximately two-thirds of the 13 000 professors who responded designed upper-level courses so that students solve complex real-world problems (TCHE, 2019[112]). However, information on teaching methods and student engagement in post-secondary education is not available across Washington, which makes it difficult to assess the prevalence of these practices.
In the two-year sector, the focus on conveying employability skills was prominent in the “professional/technical” stream, which enrolled about 32% of students across Washington’s 34 colleges in 2018/19 (SBCTC, 2019[39]). In the “academic transfer” stream (about 50% of students) and all other programmes where students take on average a much lighter course load, the extent to which students were able to develop labour market relevant skills was less clear. In the four-year sector, stakeholders emphasised the key role of work-based learning in equipping students with labour market relevant skills. However, while work-based learning is a core component of applied and professional fields and was often facilitated by faculty’s connections with industry, these opportunities appeared to be less widespread in general fields of study such as science, business, social sciences and humanities.
Several barriers were reported to stand in the way of expanding practices, both in the classroom and more broadly in post-secondary education, that support the development of labour market relevant skills. One barrier often cited by stakeholders was the limited resources and staff in career centres, as well as inconsistent engagement of teaching faculty with career centres. In several cases, the partnership between career centres and teaching staff was mentioned as a key success factor to connect students with work-based learning opportunities, as faculty members have greater awareness of specific labour market pathways for their students and in some fields, also have industry connections.
From the faculty perspective, the lack of time to engage in activities such as helping students find work-based learning opportunities or redesigning the curriculum was a main barrier. Particularly in the four-year sector, stakeholders also reported a lack of incentives for faculty to spend time on these activities, given the greater professional rewards associated with research. Faculty preparedness was also an issue: some faculty may not have received adequate training and professional development on the ways in which to incorporate labour market relevance in their teaching and to maintain updated knowledge.
Despite these limitations, several methods were mentioned during the OECD visit on how to engage faculty in teaching practices that focus on conveying labour market relevant skills, particularly in the college sector. These ranged from a deliberate focus on teaching methods as a criteria for hiring faculty members, to connecting faculty with institution-wide efforts focused on employability. Efforts to address faculty continuing education needs were also mentioned: the SBCTC requires faculty in the professional and technical stream to update their skills on a regular basis to maintain their status as certified faculty.
The Guided Pathways model is also promising. The programme helps students choose courses that form a coherent and realistic labour market pathway, and according to stakeholders can also provide a framework for faculty to adjust course content to students’ skills needs and career goals. Scaling these efforts remains a challenge, although innovative practices exist. The use of an employability lens to assess the relevance of course content provides one interesting example developed by Quality Assurance (QA) Commons, and described in Box 7.7.
Box 7.7. Quality Assurance (QA) Commons Essential Employability Qualities
Created in 2016, the goal of QA Commons is to provide “an innovative certification process that aims to ensure today’s graduates enter the workforce prepared for the responsibilities they will be expected to face”. Based on research and a pilot project with 27 colleges and universities, QA Commons has identified a set of nine skills expected to be required across fields of study and occupations, as well as a process to help programmes if they provide those skills to students. The nine skills are described as:
people skills: collaboration, teamwork and cultural competence;
problem-solving abilities: inquiry, critical thinking and creativity;
professional strengths: effective communication, work ethic and technological agility.
The process to obtain the certification that a given programme conveys essential employability qualities (EEQ certification) focuses on five aspects, reviewing whether the programme:
develops skills in a work-based context, such as through a capstone project;
co-ordinates its activities with the institution’s career services;
creates meaningful relationships with employers;
engages with students to make sure they feel they are being prepared well;
reports how its graduates fare in the labour market.
Various institutions across multiple states have engaged in this process. Kentucky, for example, has put forward 20 programmes across two-year institutions and the state flagship university.
Source: TCHE (2019[112]).
Developing new credentials through stronger partnerships with employers
Employers continue to rely on post-secondary credentials as a proxy for a certain level of knowledge and skills acquired by graduates. A recent survey suggests that 48% of employers surveyed view educational credentials compared to other job qualifications as more important than five years ago, whereas only 23% viewed them as less important (Gallagher, 2018[34]). This view was expressed in Washington as well; business associations emphasised a preference for bachelor’s degrees from flagship institutions as an important quality signal. On the other hand, employers and students, including adult learners, are seeking new ways of acquiring skills quickly, as shown by the rapid development of alternative and micro-credentials, as well as company-designed training and assessment (TCHE, 2019[112]).
However, higher education institutions face challenges in developing micro-credentials, and in integrating them with their traditional degree offer. Stakeholders in Washington raised the time-consuming and complex process of designing and securing programme approval. This challenge was often dealt with in innovative ways, for instance through the development of minors and the use of the “corporate education” arm of institutions. Other stakeholders discussed how an open dialogue with the regional accrediting body, the Northwest Commission on Colleges and Universities, and the increased focus of the body on the missions and profiles of institutions, has helped with securing accreditation for new programmes.
As previously noted, effectively engaging employers in the design of post-secondary programmes is an ongoing challenge. National research shows that the trend of company-designed training and assessment is concentrated among large national firms, whereas the overall share of employers providing tuition benefits has decreased in the past five years, from 56% to 51% providing tuition benefits for undergraduate study, and 52% to 49% providing benefits for graduate study (TCHE, 2019[112]). Among those employers who invest in training, their engagement with higher education is mixed.
In Washington, this collaboration was described as highly contingent on the existence of a trusted local college. Employer representatives met during the OECD visit reported strategies of large employers that focused on recruiting students into company training programmes through competency-based assessments. The reported goals were diverse: to identify high-potential hires, diversify the profiles of employees, and shrink the time required to hire. Different goals and approaches prevail in higher education, which can complicate partnerships between employers and institutions. Practices exist however, such as the use of intermediary organisations that can help employers and institutions collaborate, to improve the engagement of employers in institutional efforts and help institutions understand and respond to employer needs.
Recommendations for educational offering
1. Monitor the results of the Career Connect Washington initiative and the extent to which it helps more students across levels and fields of study obtain work-based experience and develop labour market relevant skills. The type of work-based learning should be defined so as to ensure the experiences are high quality; and the institutions, fields and demographics of CCW participants should be monitored to ensure equitable access to these opportunities.
2. Expand the Work Study programme to 2009 levels, even if the financial aid component is no longer necessary for Washington College Grant recipients, as a key way to provide work experience to low-income students. The programme should maintain its focus on low-income and under-represented groups, and guidelines should be developed to ensure the work opportunities provided through the programme help students obtain valuable skills for their future career.
3. As part of CCW, continue to expand innovative apprenticeship models such as Apprenti to new fields of study and explore ways to develop relevant pre-apprenticeship programmes to ensure students with lower preparedness can access these programmes.
4. Continue efforts to develop new labour market relevant learning pathways. This could include pilot projects with professional regulatory bodies to identify alternative routes to certification that facilitate career changes and alleviation of labour shortages, and pilots with employers and groups of employers to collaborate on the design of new (or redesign of current) learning opportunities that meet labour market needs, including micro-credentials. The state, in partnership with professional regulatory bodies and employers, should continue efforts to recognise quality credentials and include them in national initiatives, such as the Credential Engine (see also recommendations on information).
5. The state should work with institutions to incentivise a greater focus of faculty on ensuring all students can acquire labour market relevant skills regardless of their programme of study. Several approaches could be considered, such as: (i) targeted funding to encourage staff professional development plans in public institutions and “release time” for faculty to work in industry and other work contexts; (ii) targeted funding to encourage the provision of work-based learning opportunities in less professionally-oriented fields of study; and (iii) grants or refundable tax credits to small and medium-sized enterprises to help them provide paid internships and other high-quality work-based learning opportunities, with a particular focus on under-represented students. This could also include incentives for industry professionals to teach at higher education institutions in fields where there is typically less industry engagement.
Student supports and pathways
Washington’s student supports play an important role in raising participation and success rates among under-represented groups
Supporting student learning is fundamental to the higher education mission, and in turn is critical to promote good labour market outcomes. High-impact teaching and learning practices can help improve academic performance (Kuh, 2008[113]). Some of these practices, such as the provision of work-based learning discussed in previous section, are directly tied to improving the labour market relevance of higher education, and the employment and earnings prospects of students.
In addition to teaching and learning practices, student supports can also improve student performance and outcomes. These encompass a range of services that help students choose, access and complete post-secondary qualifications. Student supports can be financial and non-financial, including academic and career counselling, mechanisms to facilitate student mobility such as credit transfer, and information (discussed in the next section of this chapter). Student supports are particularly important in a country like the United States, given the large numbers of incoming students who are not academically ready for college-level instruction, a problem that is prevalent nationally (Chen and Simone, 2016[114]). The stakeholder workshop held in Washington as part of the project further confirmed the importance of student supports; respondents to the pre-workshop survey identified student supports, both financial and non-financial, as well as pathways into and across higher education programmes, as key areas where system-wide action would be particularly effective.
Washington has made significant investments in the affordability of post-secondary education through the Washington College Grant, as discussed earlier. Under the previous State Need Grant, a large number of students were eligible but did not obtain it due to funding constraints: in 2012/13, this was the case for about 32 000 students, out of 106 000 who were eligible (Bania, Burley and Pennucci, 2013[96]). Thus, the move towards an entitlement state aid programme is likely to have a positive impact on enrolment in future years, given the unmet demand observed in the state. The expansion of eligibility to apprentices may also contribute to rising enrolments. Some other state-wide programmes help alleviate the cost barrier to post-secondary education, with a specific focus on helping low-income students access in-demand, high-earning fields of study (see Box 7.8).
Addressing other indirect costs of attending higher education, such as childcare, is a significant concern in Washington, as noted earlier in this chapter. The state’s childcare grants programme, created in 1999, aims to help institutions provide their students with access to affordable, accessible and quality childcare opportunities. The programme is small and currently only available at the six public four-year institutions, which each receive USD 75 000 per year in state funding to provide grants to students, using a model requiring that the state grant be matched at least dollar-for-dollar by the participating institution’s administration or student government association.
Box 7.8. Helping low-income and minority students access high-demand, high-earning fields of study
Washington STEM
Washington STEM is a state-wide, independent non-profit organisation comprised of STEM experts whose role is to identify and foster innovative STEM programs and partnerships. Washington seeks smart and scalable solutions that lead to opportunities for students underserved and under-represented in STEM fields. Washington STEM supports policy making through advocacy, identifies areas of focus on which it collects data (such as early math achievement), and supports regional STEM networks. These 11 regional STEM networks bring educators, business leaders, STEM professionals, and community leaders together to build student success and connect them with STEM career opportunities in their communities.
The Washington State Opportunity Scholarship (WSOS)
The WSOS was created in 2011 to address needs in sectors including aerospace, engineering, technology and health care and rising tuition costs at Washington institutions. The programme consists of scholarships for low- and middle-income students to pursue these fields of study at the baccalaureate level and in Career and Technical Education programmes; funds are provided by industry and philanthropic organisations and are matched dollar-for-dollar by the state. This initiative has served close to 20 000 students and outcomes are promising: 61% of students served are women, 64% are students of colour and 65% are first-generation college students. While the average family income of the most recently awarded cohort of baccalaureate scholars was just over USD 41 000 at the time of acceptance into WSOS, the average salary of recent WSOS graduates employed full-time was USD 62 297. Almost 95% of WSOS Baccalaureate graduates are employed or in graduate school, and most (81%) live in Washington state.
Washington Mathematics, Engineering, Science Achievement (MESA)
Washington’s MESA programme aims to improve diversity and retention with an emphasis on traditionally under-represented students in STEM fields, including African Americans, Native Americans, Hispanic/Latinos, Pacific Islanders, and women. This programme is one of eleven state programmes co-ordinated by a national body. It benefits from industry sponsorship to fund various supports in schools, community colleges and engineering programmes. These supports are diverse, including teacher training, academic tutoring/counselling, internships, field trips, and recognition events to support both student access and retention into STEM.
Sources: Washington MESA (n.d.[115]), Washington State Opportunity Scholarship (n.d.[116]), Washington STEM (n.d.[83]).
A large body of research provides insight into the types of student supports that promote student success in post-secondary education. A range of studies using randomised controlled trials find strong positive impacts on student retention and completion of intensive and multi-faceted students supports, which include individual advising and coaching, alongside information and financial supports. By contrast, supports focused only on information or financial incentives are not found to be effective (Angrist, Lang and Oreopoulos, 2009[117]; Bettinger et al., 2012[118]; Bettinger and Baker, 2014[119]; Carrell and Sacerdote, 2017[120]). Some of this research suggests effective supports can reduce the cost per degree, given that the cost of the intervention is compensated by the increase in degrees produced (Scrivener et al., 2015[121]).
Washington is a leading state in developing Guided Pathways, an evidence-based model that aims to redesign the experience of college students from start to end. The approach involves four main components. First, institutions develop easily accessible, student-facing maps of college pathways (e.g. courses required to complete a programme, transfer to a four-year institution, time to completion, etc.). Second, students obtain advice in their choice of pathways and help in developing an academic plan, whether they have a goal in mind or are undecided. They obtain support, such as academic advising to stay on the pathway. Finally, pathways are designed with relevant learning outcomes to be achieved to support further study or employment in a chosen area (Bailey, 2017[122]). By providing funding for the expansion of Guided Pathways programmes to all colleges, Washington is taking a step towards a more systematic student support system, which could help with retention and transfer.
Transfer pathways, primarily between two-year and four-year institutions, also have the potential to increase access and completion of post-secondary education and, in turn, to improve students’ labour market outcomes. About half of Washington students who earn a bachelor’s degree in the state’s public four-year institutions, and one-quarter of those obtaining a bachelor’s degree in the private not-for-profit institutions, have transferred from a two-year institution. Washington is a leader in this area; a recent national study found that a little more than half of students who have transferred earned a bachelor’s degree within six years of having started at a community college, placing Washington second out of all states (Shapiro et al., 2017[123]).
State authorities attribute this success to the existence of collaborative bodies that bring the public and private sectors together, the Joint Transfer Council and the Intercollege Relations Commission, and to state-wide transfer associate’s degree agreements. The development of major-specific transfer degrees, particularly in areas of high demand, is a promising step to help students identify areas of interest and prepare for success in four-year institutions. An example of these pathways are the ten “major related programs” (MRP), in biology, business, computer science, construction management, math education, music, nursing and pre-nursing, engineering and engineering technology. While major-specific transfer degrees are recent and still compose a small share of all transfer degrees, early findings suggest that students who complete these degrees often complete a bachelor’s degree as effectively as non-transfer students (that is, with a comparable number of median credits). These programmes are regularly reviewed to assess their relevance and student take-up (WSAC, 2019[124]).
Ensuring good outcomes for more students requires well-targeted and more effective student supports and pathways
The state’s efforts to support student access and success in higher education have shown results, but more remains to be done. All population groups have seen increases in their attainment rate since 2013, with the largest increase among Hispanics (+6 percentage points), followed by Black/African Americans (+8 percentage points), Asians (+5 percentage points) and Whites (+3 percentage points) (WSAC, 2019[30]). However, gaps remains wide: in 2017, 25% of Hispanics and 39% of Black/African Americans aged 25-44 had a degree, compared to 51% of Whites and 71% of Asians.
Improving student supports and pathways can help improve access and completion rates, and opportunities exist in Washington to expand and improve them, and to increase students’ use of these supports. In particular, the design of comprehensive supports provided systematically should be pursued, as evidence shows that multi-faceted supports provided at strategic junctures or on a continuous basis tend to be more effective than interventions of one type and at a single point in time. Efforts should also continue to increase supports’ take-up among vulnerable groups. Broadly available services, such as career services, are not always being taken advantage of. While there are no Washington-specific data, the 2018 annual report of the Survey of Student Engagement suggests that only about half of seniors utilised career resources, even though those who did found them helpful in gaining confidence in their career plans. The survey also found that participation in an internship or field experience was less frequent among students of colour (NSSE, 2018[45]).
Transfer pathways could also be improved. Despite the good results of transfer students in Washington discussed earlier, more students could take advantage of transfer opportunities. Indeed, the increase in annual enrolment in public four-year institutions over the past decade is largely a result of the growth of direct-entry students (+26.7% between 2007/08 and 2016/17). By contrast, the enrolment growth of transfer students has been around 10.1% over the same period (ERDC, 2019[24]). Increasing students’ use of transfer pathways may be particularly important among under-represented groups. National research indeed suggests that income levels make a difference in student participation in transfer pathways. Low-income students are less likely to transfer to a four-year institution, and if they do, less likely to attain a bachelor’s degree, compared to their high-income peers. This is despite the fact that both groups are as likely to attain a pre-transfer certificate or an associate’s degree, suggesting that the opportunity gap grows as student progress along their educational pathway (Shapiro et al., 2017[123]).
To improve the design and use of student supports, more needs to be known about the specific barriers facing particular groups with low educational attainment. In addition to minorities, women, and low-income students, more should be known about adults who have either no post-secondary credential or attended some college but dropped out. Adults in that situation who are between the ages of 25 and 44 represent together close to one million adults in Washington (WSAC, 2018[125]). They face particular challenges in obtaining a post-secondary credential, and in fact, over the past decade, the share of students over 30 at public four-year institutions and over 25 at community colleges has declined slightly, from about 16% to 13.6% and 43.3% to 40%, respectively (ERDC, 2019[24]; SBCTC, 2019[39]). In addition, despite the existence of a policy supporting the award of academic credit for prior learning, a recent state report on the subject suggests a slight decrease in the credits recognised, in large part due to decreased veteran enrolment in community colleges, who were the main recipients of this approach (WSAC, 2018[126]).
The recent launch of Washington’s Adult Reengagement Framework, alongside efforts to foster the recognition of prior learning since 2012, are promising steps. The Framework proposes a multi-pronged approach, leveraging the state’s expanded financial aid, a dedicated information portal, and engaging multiple stakeholders in reaching out and addressing the barriers faced by adult learners. In this effort, it will be important to take account of the wide variability of learner needs and work with institutions on how they can best support adult learner success. Similarly, the state’s prior learning recognition approach should continue to be monitored, in particular with respect to institutional progress in recognising learning acquired through new pathways, including alternative credentials.
Box 7.9. Innovative student pathways: Central Washington University’s FlexlTrade Degree Pathway
Working together with local post-secondary institutions, labour unions, and the construction industry, Central Washington University's Information Technology and Administrative Management (ITAM) department designed a pathway to complete a Bachelor of Applied Science (BAS) with a specialisation in project management for individuals who have completed a registered apprenticeship programme in the construction trades.
The FlexITrade pathway is designed to streamline the path to complete a bachelor’s degree by enabling skilled workers to transition into management and other opportunities. It is expected to benefit trade organisations in recruiting and retaining skilled workers, and employers by offering project management skills along with essential soft skills highly desired in most organisations working in the construction trades, as well as other industries.
Key features of the programme include:
performance-based, flexibly-paced courses available fully online;
high-touch advising from a dedicated faculty mentor;
modular, alternative credentials designed for immediate career advancement;
opportunities for prior learning assessment incorporating professional and on-the-job learning.
The FlexITrade pathway was designed through an extensive collaborative process to help create a bridge between two separate systems: trade apprenticeships and higher education. The programme was designed in collaboration with community and technical college partners and with input from a steering committee with representation from the electrical, construction, and plumbers/pipefitters trade unions, the construction industry, the Washington State Lieutenant Governor’s office, and trade advocacy organisations. The programme was designed using seed funding of USD 130 000 provided via legislative allocation.
The performance-based, flexibly-paced option for study in the Information Technology and Administrative Management (ITAM) programme began in 2014. It has served over 120 students as of Spring 2019. The full FlexITrade programme was designed in 2018/19, with a goal for implementation in 2020.
Source: Information provided by Central Washington University to the OECD, June 2019.
The expansion of student supports may best be achieved through system-wide investments, especially in community colleges, as discussed in the funding section of the chapter. With respect to transfer pathways, efforts to further expand and simplify articulation agreements, as well as better communicating them to prospective students, are important strategies. Better understanding the institutional incentives to develop transfer agreements should be part of this effort. As institutions have the authority to establish entry standards and decide when to accept credits, unexpected barriers may exist. For instance, some stakeholders met during the OECD visit noted that accepting transfer students can be a challenge for four-year institutions because of their increased reliance on tuition fees as part of their total funding. Further, while creating transfer pathways can involve substantial benefits for students and employers, the collaborative work involved for institutional partners is significant.
Another challenge lies in effectively expanding transfer pathways in an environment where students’ learning experiences become more complex. One example of building pathways between apprenticeship and a four-year institution is promising in this area (see Box 7.9). Washington is also working with Credential Engine, a national non-profit organisation building a national registry of credentials, to better understand the increasingly diverse landscape of educational credentials. The state aims to include approximately 3 800 Washington credentials currently included in the state’s Career Bridge website in the Credential Engine national registry. This initiative places Washington among the first states to populate this growing registry of degrees, certificates, licenses, apprenticeships and micro-credentials. Further expanding the credentials included in such registry could benefit both students and institutions, including by facilitating the development of credit transfer and credential recognition agreements.
Recommendations for student supports and pathways
1. Scale up Guided Pathways programme to serve all first-year students at community and technical colleges, and monitor student take-up by programme and demographic group.
2. Undertake a study of under-represented students in high school and in the first year of post-secondary education. The study would help gain a better understanding of student motivations for pursuing post-secondary education and particular fields of study, as well as the barriers they face in completing higher education. It would further help identify where gaps exist between student needs and available supports.
3. Develop a state-wide mapping of supports currently available to post-secondary students, including those directly linked to post-secondary attendance and broader social benefits (including various supports related to health, childcare, etc. with a particular focus on ensuring their availability is assessed on a regional and local basis).
4. Dedicate or enhance existing state funding to expand and improve pathways from secondary to post-secondary education, across post-secondary institutions and programmes, and between post-secondary education and other learning programmes. This could include targeted funding to train and equip high school guidance counsellors with: (i) knowledge of different study and career choices, including alternative pathways such as apprenticeships, dual enrolment and state initiatives to facilitate transitions (e.g. Running Start, High School and Beyond, Guided Pathways); and (ii) skills to communicate effectively with different types of students, particularly students from low-income and under-represented group.
5. Develop evidence-based nudging programmes targeted to under-represented groups, and monitor their take-up and impact in the state. This could include pilot programmes targeting high school students in low-income schools through a combination of information and help with applications for college and student aid. Using information on first-year students’ income and academic records, identify students most at risk of dropping out and consider piloting a programme that enrols them automatically in career and study counselling.
6. Continue to improve state efforts on credit transfer. These could include:
(i) monitoring the take-up of credit transfer opportunities by under-represented groups;
(ii) targeted funding to develop standardised, state-wide articulation agreements between two-year and four-year institutions (e.g. all transfer degrees from two-year public institutions are recognised in their entirety by four-year institutions, except in cases justified by the four-year institution);
(iii) targeted funding to expand the opportunities for credit transfer to include community colleges’ professional and technical programmes and, more broadly, Career and Technical Education (CTE) courses that offer a good return on investment, including dual credit articulation agreements (as recommended in the 2017 State Auditor’s report); to help recognise high-quality CTE opportunities, develop a process to involve employers in helping set industry standards, as recommended in a previous OECD review of vocational education and training in the United States (Kuczera and Field, 2013[127]).
(iv) create a centralised database of all credit transfer opportunities into post-secondary education (building on the Ready, Set, Grad website), across post-secondary programmes, and between post-secondary programmes and quality CTE and alternative credentials.
Information
Washington has developed multiple informational tools to provide data and guidance on post-secondary education and workforce needs
In order to support the different needs of students and other stakeholder groups, Washington has developed many digital tools to provide information on post-secondary opportunities, career pathways and the labour market. In addition to informational tools to help students plan their careers and provide guidance on study choice, there are multiple dashboards that match education and workforce data to provide information about skills gaps across the state.
Student-level data on post-secondary enrolments, progress and completions at public four-year institutions is collected through Washington’s Public Centralized Higher Education Enrollment System (PCHEES), an entity organised under the state’s Office of Financial Management (OFM). The SBCTC collects information about educational and labour market outcomes of graduates from Washington’s community and technical colleges, and the Independent Colleges of Washington (ICW) collects information about graduates from private, not-for-profit four-year institutions.
The ERDC maintains two public-facing dashboards on the outcomes of post-secondary graduates. Information on student enrolments, progress and completions at public four-year institutions is provided by institution, field of study, and specific sub-groups in a comprehensive dashboard that was created in collaboration with the six public universities and colleges. Data on earnings outcomes of Washington graduates were included in a new dashboard in 2017, matching Unemployment Insurance (UI) wage records to education data from the PCHEES and SBCTC. The Earnings for Graduates dashboard provides median earnings of graduate cohorts from 2007/08 onwards by award type, field of study and institution. Data are available by degree type at both the sub-baccalaureate and baccalaureate levels for graduates of public two-year and four-year institutions. Earnings data is also available from industry councils and apprenticeship committees for completers of apprenticeship programmes. More detailed information on earnings and employment outcomes for graduates of the community and technical colleges are presented in a different dashboard maintained by SBCTC.
SBCTC is responsible for maintaining a dashboard to provide information on patterns of workforce demand and supply state-wide and by region. It also includes median earnings by occupational or career cluster and identifies gaps by sub-baccalaureate and baccalaureate qualification level. In parallel, WSAC provides, through its Roadmap dashboard, predicted supply and demand gaps using employment projections from Washington’s Employment Security Department. Typically, employment projections at state-level rely on the U.S. Bureau of Labor Statistics (BLS) ten-year Occupational Outlook forecast, which includes the minimum level of education and training required for entry into an occupation. In order to provide an indication of future gaps in skill supply and demand, diverse methodologies can be used (Wilson, 2014[128]; Hershbein and Hollenbeck, 2015[129]). Washington’s Roadmap dashboard includes projections for occupations at both middle and advanced skill levels based on empirical analysis and multiple sources of data, as seen in Table 7.6.
Table 7.6. Overview of digital sites or platforms linking information about post-secondary education with information about the labour market in Washington
Several new initiatives are under development in Washington to improve the quality and availability of information about post-secondary education. The Adult Reengagement Initiative, highlighted previously, targets adult learners to support them in returning to post-secondary education and completing a credential. The initiative includes a planned information portal (College and Career Compass) with targeted outreach, particularly to under-represented populations, providing information related to career options and post-secondary programmes leading to relevant credentials. Another recent initiative from the Workforce Training and Coordinating Board is a collaboration with the national Credential Engine, discussed in the previous section. .Table 7.6 provides an overview of informational tools currently in use that have been developed or initiated by a state agency.
At the same time, untargeted information and insufficient data can be a hindrance to reaching the state’s post-secondary attainment goals and improving labour market outcomes
Governments across the OECD recognise that career guidance and the collection of labour market information can help learners enter post-secondary programmes that match their interests, aptitudes and abilities, and lead to promising employment and earning outcomes. To this end, many have invested heavily in building linked education and employment information systems, and platforms displaying the information they yield. Two particular challenges in Washington are insufficient data to provide a detailed picture of graduate labour market outcomes, and ensuring that data on labour market outcomes is available to students and families in a way that effectively supports their choices.
At the state level, Unemployment Insurance (UI) wage records typically indicate the industry in which an individual is employed, but they do not provide information on the specific occupation of graduates. Thus, it is difficult to assess whether or not a graduate is employed in an occupation that matches his or her field of study. In order to obtain more detailed information on in-field job placements, higher education institutions typically use alumni surveys. However, these data can be unreliable due to low response rates and poorly designed surveys. In the past, the Workforce Training and Education Coordinating Board has periodically surveyed Washington employers in order to obtain information about possible skills gaps, hiring and training practices. However, the last survey of this kind was conducted in 2012 and other industry-specific employer surveys are currently conducted on an ad hoc basis. WSAC also conducted an employer survey for its regional educational needs assessment in 2017 (WICHE/WSAC, 2017[40]), but there are no plans to carry out this survey on a systematic basis. Other countries, such as Australia and the United Kingdom, conduct regular surveys of employers regarding their skills needs and satisfaction with graduates, which could be considered in Washington. Australia in particular offers an interesting example by linking their graduate and employer surveys (see Box 3.14 in Chapter 3).
Furthermore, because of rising student debt levels and growing public concern over the cost of higher education, reporting accurate information on student debt alongside earnings data is critical. Indeed, some studies suggest that a significant share of students do not fully understand the costs of higher education or how much debt they are accumulating (Akers and Chingos, 2014[130]). Particularly, young people who are the first ones in their family to enrol in post-secondary education are likely to lack information about the returns on their education. For first-generation students, the costs of attending higher education are more salient than future benefits. It is typically more difficult for first-generation students to find information about the benefits of post-secondary education attendance and field of study choice within the students’ primary social network (Bleemer and Zafar, 2018[131]).
The most recent survey of state post-secondary data systems conducted by the State Higher Education Executive Officers (SHEEO) Association shows that many states provide coverage of both public and private, not-for-profit higher education institutions in their post-secondary data systems. In Washington, data on post-secondary graduates is only collected for public two-year and four-year institutions. Additionally, earnings data on Washington graduates is not available by sub-population or region/locality. Disaggregating earnings data by characteristics such as gender and race or ethnicity would allow policy makers to better understand and monitor the labour market outcomes of under-represented populations. Moreover, making this information available at programme level would allow students and other stakeholders to more accurately assess the costs and benefits of choosing their programme of study.
Finally, Washington’s multiple dashboard tools require users to consult several different sites for information about student population and enrolments, institutional characteristics, and graduate outcomes. In addition, SBCTC’s workforce supply and demand dashboard identifies skills gaps at sub-baccalaureate and baccalaureate levels. At the same time, the WSAC Roadmap dashboard provides projections for future skills gaps. Furthermore, it is unclear if the intended users of SBCTC’s dashboard are primarily workforce development councils and students at community and technical colleges, or if it is intended for a broader group of users within both the higher education and workforce development communities. While workforce dashboards were initially created as part of the workforce development system aimed at middle-skill workers, they can also serve as tools to improve the link between workforce development and higher education policy by strengthening and expanding their use.
There are a number of websites that are targeted to students and their families to provide guidance on opportunities and pathways in post-secondary education. These include sites such as “Ready, Set, Grad” and 12th year initiatives to help high school students navigate applications for financial aid and other educational choices. However, educational information is often disconnected from information on the labour market. Providing easy access to layered information about the costs and benefits of educational choices through single websites and/or mobile applications is a way to help students make better choices. Because the tailoring of information is crucial to ensure that it reaches students in a manner in which they can easily access and absorb it (Lavecchia, Liu and Oreopoulos, 2015[132]), creating a single, public-facing tool can contribute to improve the accessibility and user-friendliness of labour market information and post-secondary opportunities.
Recommendations on information
1. Improve the availability of key data by sub-population. For instance, data on median earnings and average student debt should be made available at the individual programme level, rather than only by major field of study. It should be possible to disaggregate earnings data by sub-population and locality, in a similar way as is currently done with data on post-secondary enrolments and completions. To protect student privacy and avoid the potential for identifiable individual data with small samples, aggregate wage data could be provided for combined cohorts at programme level. In addition, consider ways to expand coverage of labour market outcomes data to include information about graduates from private, not-for-profit institutions and making this information available to the public in the same place, for example by further developing the dashboards maintained by ERDC.
2. Explore the development of a state-wide graduate outcomes survey to capture in-field job placement rates and assess the signalling value of post-secondary qualifications. The survey could cover a range of areas, including whether or not graduates are matched to jobs related to their field of study or level of qualification, and the extent to which graduates are using the skills acquired from post-secondary education. A state-wide graduate outcomes survey would standardise information about graduate experiences, including in-field job placements and skills use, rather than relying on information from individual higher education institutions on an ad hoc basis. Such an approach would support higher education strategic planning and complement the actions proposed in Recommendation 1, in particular through the proposed employer survey. In the longer term, the graduate outcomes survey could be combined with an employer survey to gain a better understanding of the quality of graduate skills, as is current practice in Australia and the United Kingdom (see Chapter 3).
3. Consider creating a single skills supply and demand dashboard for Washington that consolidates information from the SBCTC workforce supply and demand dashboard and the WSAC Roadmap dashboard. The SBCTC dashboard and the WSAC Roadmap dashboard rely on different data sources and are targeted towards different users. If a single skills supply and demand dashboard is created for both middle- and advanced skill levels, this could include both current and projected skills gaps, drawing from the data sources that are currently used in two different dashboards. In addition, using real-time labour market information about skill demand, granular level data about top skills requirements could be extracted by occupation or field. A single skills supply and demand dashboard for the state should also identify skill gaps by region, as is currently done in the SBCTC workforce supply and demand dashboard.
4. Review and consider consolidating existing informational tools and portals into a single information platform with signposts helping specific user groups identify the information they need. Information should be designed so as to clearly respond to the needs of different users. The platform should provide links to existing dashboards and efforts should be made to ensure that the metrics used in each dashboard are transparent and clearly defined. To the extent possible, the metrics should be harmonised such that consistent definitions are used throughout the state for both post-secondary and workforce data systems. Better understanding how individuals use labour market and learning information could help in designing an integrated tool. The Labour Market Information Council of Canada (see Box 3.12 in Chapter 3) may offer useful insights in this area.
References
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