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Falling Short: Why We Aren't Meeting the Economy's Demand for College Graduates?

By Vicki Alligood

Are we meeting the economy’s demand for college graduates? You might assume the answer is yes — taking into consideration that the share of adults with a college degree is at its highest point ever, and there’s an increased focus on trade and apprenticeship programs to address the “skills mismatch” in our labor force.

But, there’s data suggesting the answer is no, as Kartik Athreya, executive vice president and director of Research, discussed at a recent “Conversations with the Fed” program. The event drew over 120 business and community leaders from the Richmond region.

Why is this important? As Athreya said, “Understanding the health, both present and future, of our workforce is an important part of our mission to support a healthy economy. So, it’s important to understand education generally, and higher education in particular.”

He shared data that the gap in earnings between workers with and without a four-year degree has been large for roughly four decades. This gap is known as the “college premium” and its persistence is unusual from a historical perspective. He went on to show the links between socio-economic status, preparedness, college enrollment and completion. He also noted that college isn’t necessarily the right path for everyone, stressing the importance of the decision based on the individual.

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Following the presentation, representatives from Junior Achievement of Central Virginia (JACV) and the Virginia Council on Economic Education (VCEE) joined the “Conversation” to talk about examples of community-based initiatives that address how to prepare students to choose the path that’s best for them, and succeed along that path.

Daphne Swanson, the president and CEO of JACV, discussed the new JA Finance Park and JA Career Center at Libbie Mill Library. “The JA Career Center is the only interactive research center for middle and high school students in the region to explore different career paths. Students discover what education is required for each path, how much it will cost and the return on their investment.”

Dr. Stephen Day, director of the VCU Center for Economic Education, highlighted their teacher training initiatives and VCEE’s collaboration with the Richmond Fed on getting resources like the Fed’s “Invest in What’s Next” tool into the hands of teachers. “‘Invest in What’s Next’ is an online mini-course that helps students become college and career choice ready,” explained Nick Haltom, director of economic education for the Richmond Fed. “This is the first major financial decision for most students, and the characteristics make it especially big and challenging. The course is designed to give students a lot of interactive practice with the decision.”

Video is temporarily unavailable.

If you’re interested in learning more, check out our recent Annual Report feature essay on this topic. You also can view Athreya’s presentation and watch video clips from the “Conversations” program:

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