As demand for workers with college degrees rises, Houston and Texas are predicted to fall short of the Texas Higher Education Coordinating Board’s (THECB) goals for the next decade, according to a new report from Rice University’s Houston Education Research Consortium (HERC), part of the Kinder Institute for Urban Research.
“Transitioning to College and Work: Labor Market Analyses in Houston and Texas” examines supply and demand for labor in Houston and Texas. It also studies which occupations and skills are in demand in the Houston area, as well as the wages and unemployment benefits paid to high school graduates from the Houston area. The report drew on data from the U.S. Census Bureau, Texas Workforce Commission and Houston Independent School District (HISD).
The THECB established a goal for 60% of Texans aged 25-34 to hold a postsecondary credential by 2030. But the report says Houston will fall 20 percentage points short of that goal and Texas will come up 10 percentage points short.
For workers, the data also showed that higher education generally pays off with higher earnings. Researchers Brian Holzman, Mehreen Gul, Esmeralda Sánchez Salazar and Camila Cigarroa Kennedy found that higher wages associated with a postsecondary credential might be related to the short supply of highly skilled workers.
Other report findings:
- Employers will continue struggling to find workers with bachelor’s degrees for the next decade. Demand for such workers increased 54% between 2013 and 2016, while the supply of such workers increased only 13%. Demand for bachelor’s degree holders will continue increasing at a faster rate than supply through 2030.
- On the other hand, demand for workers with an associate’s degree decreased 4%, while supply for such workers increased 13%. Through 2030, demand for these workers will increase slightly but supply will decrease.
- Workers with a bachelor’s degree earned 120% more than workers with a high school diploma in 2016. This advantage is expected to double by 2030.
- Workers with an associate’s degree earned 70% more than workers with a high school diploma in 2016. This advantage is expected to stay flat through 2030.
Despite evidence of higher earnings for those with a postsecondary degree or certificate compared to workers with just a high school diploma, the researchers uncovered considerable differences in the wages and unemployment insurance benefits people collect early in their careers based on gender, economic disadvantage and race and ethnicity among HISD graduates in spring 2007-2009. In particular, women with a degree or certificate continued to earn less than men, and Black and Asian postsecondary graduates earned less than whites.
Holzman noted that HISD has implemented a number of innovative programs aiming to improve college readiness since the students in wage and unemployment insurance analysis graduated.
“Since these students did not have opportunities to participate in these efforts, it is possible labor market outcomes for future cohorts will be different,” he said.
Holzman said that while getting a college education pays, the skills required by local economies may vary.
“In our analysis of the Houston area, we found jobs requiring strong interpersonal skills were in high demand but relatively short supply,” he said. “These jobs didn’t require advanced degrees, but, on average, 1-2 years of education post-high school.”
The researchers suggested policymakers should identify strategies to help students obtain postsecondary credentials.
“Otherwise, economic growth may slow or employers may need to attract more educated workers from other parts of the country,” the report read. “Equipping students with interpersonal skills, in addition to academic knowledge, may help students be prepared for the needs of Houston’s growing economy.”
“Strong academic supports and expanding college and career readiness efforts may help students become successful in the path to college and the workforce,” the report added.
The COVID-19 pandemic and subsequent economic recession will make meeting the 60×30TX goal more challenging, Holzman said.
“Students and their families are re-evaluating their college plans due to financial hardship and the job market,” he said. “Interventions and supports at school districts and colleges will become more crucial, particularly for students from marginalized backgrounds.”
The report is available online at https://kinder.rice.edu/research/transitioning-college-and-work-part-3-labor-market-analyses-houston-and-texas. To schedule an interview, contact Amy McCaig, senior media relations specialist at Rice, at 217-417-2901.