The Economic Implications of Education and the

Investment Thereof
Josh Hunt
4/16/15
Macroeconomics

Education is a sensitive subject that all people will have to make a decision on sometime
in their life. Education is the quintessence of learning the correct skill sets to land a good job.
However, increasingly, we are hearing stories of students who cant find work. They cant find a
job that can put their degree to good use. Many find themselves asking the question Was it
worth it. An influx of reasons and studies has attempted to give insight to this question. There
are a variety of questions that can be asked from this, like are there simply too many people
going to college? or Is it a mere mismatch in skills sets that people are learning? or Do jobs,
that once needed a BA that now need a MA, really need two more years of extra learning?.
These are all serious questions that overall carry long term impacts in the economy. The overall
question that these questions present is How much further will educational investment create a
larger GDP. Although it may seem that there are simply too many people going to college,
indeed, these people are learning the wrong skill sets, and there for the education system should
be renovated.
In a recent study put out by the Bureau of Labor Statistics, research has shown that the
unemployment rate for people 25 years and older who have a bachelors degree is hovering
around 3 percent, about 1.5 million people. On an average, 1.5 million people from month to
month are struggling to find a job. This statistic does not include if employed young adults with a
degree are in a job that would put their major to use. The U.S. Census Bureau estimates that at
least 47 percent of working Americans have an Associates degree or higher. However, in
another report put out by the U.S. Bureau of Labor Statistics estimates that only 26 percent of
jobs in the workforce require an Associates degree or higher. It seems as though 21 percent of

Americans are over educated in their work. Yet it would seem that a college education plays an
important role in the American dream.
This brings up an interesting question. If more people were educated for the right reasons,
would there be an increase in national GDP? Does it seem plausible that more education could
create a larger, more innovative, and more creative workforce? Using psychology majors as an
example, the fastest growing job, the industrial-organizational psychologist, pays a median of
$83,000 a year. Adding only 900 jobs to the next coming year, psychologists require an
attainment of a license, a doctorate, a multi-year internship, and to pass an exam. Psychology
majors may be underpaid in their work, and the ones who arent require a doctorates degree and
years of training to come close to paying off their student loans. So this brings back the crucial
question if at some points it may prove advantageous to attain more education. At some points it
does, and at others, it doesnt. A Fine Arts major may find it difficult to pay off their student
loans, and even more difficult if they went on to attain a masters or even a doctorates. Theres
simply not a demand for Art History doctorates. On the other hand, a Computer Science major
may find it very advantageous to advance their education level. According to the Bureau of
Labor Statistics, by 2022, masters degree requirement for jobs with a Computer and
Mathematical background are estimated to grow by 26 percent. Indeed, answering the question
of whether education is worth investing in is purely situational.
These two ideas both A group called ManpowerGroup annually puts out a list of the top
10 job industries that are the hardest to fill. The most recent publication, 2012, states that jobs
that entail Skilled Trades Workers, Engineers, Sales Representatives, Technicians, and
Information Technology staff were the hardest areas of jobs to fill in the world. In the U.S.,
Skilled Trade Workers, Engineers, and Information Technology staff were the hardest positions

to fill. In a survey conducted by the same group, the most common reason a company
couldnt/cant find people to fill their vacancies is because of the simple lack in talents for that
job. Over 55% of employers in the U.S. apart of this survey stated that a lack of talent for the job
was a factor. There were simply not enough people in the workforce that can fill the job
requirements. This brings about an interesting conclusion brought about by previous research. It
seems as though many Americans are getting the wrong kings of talents. According to the
National Center for Education Statistics, the most common degrees attained in the U.S. are
Business, Social Science & History, Health and Medical degrees, Education, and psychology.
However, as already discussed, Skilled Trades, Engineers, and IT staff are the hardest positions
to fill. Going along with this, the Medical, Technological, Construction, and Social Service
industries are to be the fastest growing industries in the United States. It seems there is an
apparent mismatch in filling jobs within the United States. Other countries seem to find it easier
to fill these jobs. Countries like Ireland, the Netherlands, and Spain, are ranked the best at
matching peoples skills with those needed in their economies. Japan, Brazil, and Bulgaria are
ranked the countries find it hardest to match these jobs. The United States ranks the fifth worst
country to match job requirements with skills people have.
Indeed, many are finding it more difficult to find a job that fits their preparations. As a
country, education is not having the results of their original intentions. There is a mismatch in
skills attained and skills needed. There needs to be a way that we as a nation will be able to find
solutions to these problems. Indeed, a problem such as this can lead to a smaller GDP. Being
able to successfully combat this problem would and should result in an increased GDP. As we as
a nation move forward, it is a necessity for us to be able to find solutions to a growing
persistence as job matching. A solution for many countries is guiding students to certain

institution for schooling. In many European countries, there are different high schools, and
students that attend the highest ranking school are the only students allowed to continue on to
college. As a result, there are less people going to college, which controls this idea of academic
inflation. This is just one example of many ideas being ferretted out. As we as a country move
forward, we need to give ear to this problem, and provide a solution to it. Indeed, solving the
problem of education and skill necessity imbalance will escalate the nations GDP, and make the
United States a more prosperous place to live.

Works Cited:
Weiner, Joann. The Need for College Degrees. The Federal Reserve Bank of New York. 5 Sept.
2014. Web. 1 April, 2015. http://www.newyorkfed.org/research/current_issues/ci20-1.pdf%20
Occupational Employment Projections of 2022. U.S. Bureau of Labor Statistics. Dec. 2013.
Pages 8, 11-15. Web. 15 Mar. 2015. http://www.bls.gov/opub/mlr/2013/article/pdf/occupationalemployment-projections-to-2022.pdf
Talent Shortage Survey. ManpowerGroup. 2012. Pages 1-15. Web. 4 Mar. 2015.
http://www.manpowergroup.us/campaigns/talent-shortage2012/pdf/2012_Talent_Shortage_Survey_Results_US_FINALFINAL.pdf
Education Fast Facts. National Center for Education Statistics. ID NCES 2014-015. Web. 7
Mar. 2015. https://nces.ed.gov/fastfacts/display.asp?id=37
Singh, Raghav. The Obsession with College Degrees: Are Too Many People Seeking a Degree
for the Wrong Reasons?. Ere.net. 2 Jul. 2014. Web. 4 Mar. 2015.
http://www.ere.net/2014/07/02/the-obsession-with-college-degrees-are-too-many-peopleseeking-a-degree-for-the-wrong-reasons/
Weiner, Joann. Why Sally cant get a good job with her college degree. The Washington Post.
5 Sept. 2014. Web. 7 Apr. 2015. http://www.washingtonpost.com/blogs/she-thepeople/wp/2014/09/05/why-sally-cant-get-a-good-job-with-her-college-degree/
Educational Attainment. United States Census Bureau. 2014. Web. 8 Apr. 2015.
http://www.census.gov/hhes/socdemo/education/data/cps/historical/
Occupational Outlook. United States Department of Labor. Web. 30 Mar. 2015.
http://www.bls.gov/emp/ep_table_104.htm%20