US Economy

A Policy Agenda to Develop Human Capital for the Modern Economy

February 4, 2019  • Glenn Hubbard, Austan Goolsbee & Amy Ganz

Authors

Austan Goolsbee, Booth School of Business, The University of Chicago
Glenn Hubbard, Columbia Business School, Columbia University
Amy Ganz, Aspen Economic Strategy Group

Working Group Members

  • Sylvia M. Burwell, American University
  • Mitchell E. Daniels, Jr., Purdue University
  • Melissa S. Kearney, The University of Maryland
  • Ruth Porat, Google
  • Penny Pritzker, PSP Partners
  • Margaret Spellings, The University of North Carolina System

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Abstract

Globalization and technological innovation have intensified the demand for college- educated workers. In 2017, college graduates earned 65% more than non-college- educated workers and were twice as likely to be employed. This proposal recognizes the simultaneous need for more college educated workers and also for a higher level of labor market skill among non-college educated individuals. We propose to invest in the upskilling of the American workplace by better leveraging the potential of the community college sector. Community colleges offer widely accessible and flexible postsecondary education and midcareer training opportunities. They are also a gateway to four-year colleges for millions of students. Yet, despite their promise and potential, community colleges are under intense resource pressures that constrain the educational and labor market outcomes of their students. We call for a new federal grant program to provide funding to community colleges, contingent on institutional outcomes. Our cost estimates suggest new funding on the order of $22 billion per year. This new public investment in community colleges would promote the policy goals of: (1) increasing the supply of college-educated workers; (2) expanding opportunities for midcareer skill development and training; and (3) providing better pathways into the workforce for non-college-educated workers. We additionally support a set of six complementary proposals to further advance these stated goals.