As this issue went to press, a wave of coronavirus closings and dislocations began sweeping our state and the nation. This will have obvious impacts on Texas government and the state’s economy, but it’s too early to say definitively what the effects will be. The Comptroller’s office will be monitoring the situation closely.
As we saw in Part 1 of this two-part series on young Texans, Texas’ under-18 population has been growing fast, and today accounts for one of every 10 kids in the U.S. Our population growth has been driven in part by a historically strong economy compared to the U.S. as a whole. It should offer our young people significant job opportunities — if they have the education and training employers want.
In this article, we’ll explore the economic trends and educational resources that will determine how well young Texans will fare in the job market in the coming decades.
More Jobs (That Need More Skills)
Young Texans seeking work can take advantage of state job growth that consistently outperforms that of the national economy as a whole. From 2002 to 2018, Texas saw average annual employment growth of 1.5 percent versus a nationwide average of 0.7 percent.
The nature of work itself is changing, however, and jobs requiring specific technical knowledge are becoming much more common. According to the Pew Research Center, overall U.S. employment rose by 50 percent between 1980 and 2015, but the number of jobs requiring “analytical skills,” such as critical thinking and computer skills, rose by 77 percent. Wages for this group were higher and rose more throughout the period. By contrast, employment in roles requiring manual labor, machinery operation or tool manipulation rose by just 18 percent and saw the lowest wage increases.
Similarly, September 2019 employment projections issued by the U.S. Bureau of Labor Statistics forecast job declines in relatively low-skill occupations such as retail sales and office and administrative support — and rapid growth in health care and related services, computer and mathematical occupations and renewable energy.
The same trends are occurring in Texas. The Texas Workforce Commission (TWC) reports that (PDF) Texas labor force participation correlates strongly with educational attainment (Exhibit 1).
Exhibit 1: Texas Labor Force Participation Rates By Educational Attainment, 2019
Roll over the chart for specific values.
Educational Attainment
2019
Less than a high school diploma
54.3%
High school graduates, no college
61.0%
Some college or associate degree
66.9%
Bachelor’s degree and higher
74.0%
Source: Texas Workforce Commission
Higher Education, Higher Pay
Education increases wages while reducing unemployment. Census Bureau data show that higher levels of educational attainment are strongly associated with higher median earnings (Exhibit 2). In the educational tiers seen in this exhibit, the largest annual earnings gap — nearly $17,500 — occurs between those who have completed some college or earned an associate degree and those who hold a bachelor’s degree.
Texas ranks 36th in the nation for educational attainment, with just 43.5 percent of its 25- to 34-year-olds holding a postsecondary degree or certificate in 2017. But more recently, the number of Texans completing postsecondary degrees or certificates has risen (Exhibit 3).
Exhibit 2: Median Annual Earnings for Texans 25 and Older, 2017
Roll over the chart for specific values.
Educational Attainment
Estimated Median Earnings
No high school diploma
$21,582
High school graduate
$28,795
Some college or associate degree
$35,967
Bachelor’s degree
$53,444
Graduate or professional degree
$70,118
Source: U.S. Census Bureau
Exhibit 3: Postsecondary Degree Awards in Texas, 2016 and 2018
Roll over the chart for specific values.
Credential
2016
2018
Increase
Associate
87,423
93,118
6.5%
Bachelor’s
129,043
140,004
8.5%
Master’s
53,379
56,503
5.9%
Certificate
51,565
51,682
0.2%
Total
321,410
341,307
6.2%
Source: Texas Higher Education Coordinating Board
The Geography of Education
Educational attainment within the state varies, however, depending on geographic location and other factors. Significant variations can be seen among the 10 regions defined by the Texas Higher Education Coordinating Board (THECB); for instance, nearly half of all Central Texas residents aged 25 to 34 held a postsecondary degree or certificate in 2017, compared to 30.4 percent of Southeast Texas residents (Exhibit 4).
Texas’ urban areas tend to have higher educational attainment. In 2018, nearly a third of urban Texans had completed college, compared to just 16.7 percent of rural Texans (Exhibit 5).
Exhibit 4: Postsecondary Degrees/Certificates by Region, 2017
Roll over the chart for specific values.
Texas Higher Education Coordinating Board Region
Share of Population Aged 25 to 34 with a Postsecondary Degree or Certificate
Central Texas
49.7%
Metroplex
47.7%
Gulf Coast
46.7%
High Plains
40.3%
Upper Rio Grande
39.8%
Northwest
36.8%
Upper East Texas
36.1%
South Texas
34.8%
West Texas
32.4%
Southeast Texas
30.4%
Source: Texas Higher Education Coordinating Board
Exhibit 5: Urban and Rural Educational Attainment for Texans 25 and Older, 2018
Roll over the chart for specific values.
Educational Attainment
Rural
Urban
Total
Not completing high school
20.4%
16.3%
16.8%
Completing high school onlyl/th>
33.4%
23.9%
25.0%
Completing some college
29.4%
28.9%
28.9%
Completing college
16.7%
30.9%
29.3%
Source: U.S. Department of Agriculture
Even for people with similar educational attainment, there’s a significant earnings gap between those living in urban and rural areas (Exhibit 6). In 2017, U.S. urban residents who lacked a high school diploma had a median income of $23,158, $910 more than that of rural residents with similar educational backgrounds. Those with bachelor’s degrees, however, earned about $12,300 more annually than their rural counterparts.
Educational attainment also varies by race and ethnicity. The size and projected growth of Texas’ young Hispanic population, for example, makes it vital to the state’s economic health. But census data show that Hispanics are underrepresented among Texans with postsecondary education and overrepresented among those with less than a high school diploma. The size and projected growth of Texas’ young Hispanic population makes it important to address this underrepresentation.
Recent trends, though, indicate that Texas Hispanics are beginning to move forward. By 2030, the Texas Demographic Center projects a substantial reduction in the share of Hispanic Texans who lack a high school degree and an increase in the share of those attaining higher levels of education, particularly associate degrees or some college (Exhibit 7).
Exhibit 6: Urban and Rural Median Income for Americans 25 and Older by Educational Attainment, 2017
Roll over the chart for specific values.
Educational Attainment
Rural
Urban
Less than high school graduate
$22,248
$23,158
High school graduate
$29,240
$30,829
Some college or associate degree
$32,020
$36,738
Bachelor’s degree
$42,269
$54,597
Graduate or professional degree
$54,597
$72,348
All earners
$32,360
$40,843
Source: U.S. Department of Agriculture
Exhibit 7: Estimated and Projected Educational Attainment of the Texas Workforce by Race/Ethnicity, 2011-2030
Roll over the chart for specific values.
Race/Ethnicity
2011
2015
2020
2025
2030
Hispanic
Less than High Schoo
33.7%
31.2%
28.1%
25.1%
22.3%
High School or Equivalent
26.7%
26.9%
26.6%
26.2%
25.6%
Some College/Assoc. Degree
25.6%
26.6%
28.5%
30.3%
32.1%
Bachelor's Degree
10.2%
11.3%
12.6%
14.0%
15.4%
Graduate Degree
3.7%
3.9%
4.2%
4.4%
4.7%
Black
Less than High School
6.8%
5.2%
3.8%
2.7%
2.0%
High School or Equivalent
27.4%
25.6%
22.7%
19.9%
17.4%
Some College/Assoc. Degree
40.7%
43.4%
46.3%
48.7%
50.7%
Bachelor’s Degree
17.2%
17.2%
17.4%
17.5%
17.3%
Graduate Degree
7.9%
8.7%
9.9%
11.2%
12.7%
White
Less than High School 4.5%
3.7%
3.0%
2.5%
2.0%
High School or Equivalent
22.1%
20.8%
19.5%
18.3%
17.1%
Some College/Assoc. Degree
34.1%
34.7%
35.2%
35.7%
36.0%
Bachelor’s Degree
26.5%
27.5%
28.4%
29.2%
29.8%
Graduate Degree
12.8%
13.3%
13.8%
14.4%
15.0%
Asian and Other
Less than High School
9.5%
8.8%
8.4%
8.0%
7.5%
High School or Equivalent
14.9%
14.6%
13.7%
12.7%
11.8%
Some College/Assoc. Degree
22.5%
21.3%
20.2%
19.1%
18.1
Bachelor’s Degree
29.3%
29.5%
29.6%
29.6%
29.5%
Graduate Degree
23.8%
25.7%
28.1%
30.5%
33.1%
Graduate Degree
Bachelor's Degree
Some College/Associate Degree
High School or Equivalent
Less Than High School
Source: Texas Demographic Center
Breaking the Cost Barrier
In its 2019 Texas Public Higher Education Almanac, THECB reported that Texas’ public four-year institutions levied annual tuition and fees averaging $8,375 in 2017. For some students, particularly those who are economically disadvantaged, first-generation college students or nontraditional students, such costs may be a significant barrier.
Less costly options are available, however. Certificate and two-year degree programs help students develop “middle skills” for jobs that require education beyond the high school level but less than a four-year degree — a category comprising 56 percent of Texas’ current workforce demand, and including occupations such as air traffic controllers, licensed practical and vocational nurses, police officers and civil engineering technicians. In fact, many of the most in-demand jobs don’t necessarily require a four-year degree. According to JobsEQ, employers are reporting significant needs for health care administration and billing personnel, followed by positions in general business administration and management. Not coincidentally, more Texas students are pursuing associate degrees and certificates in these fields at their local community colleges.
In the 2017-18 school year, Texas’ public community colleges ranked fourth in the nation for the affordability of their two-year degrees, with an average cost of $2,209 in annual tuition and fees. The cost of certificate programs is harder to gauge since their requirements can range from 15 to 51 semester credit hours depending on the credential sought.
New Laws, New Assistance
Recognizing the growing importance of community colleges, the Legislature has increased grants and other financial support to students and now allows some two-year schools to offer certain bachelor’s degrees. Recently, new laws made it easier to transfer credits between two-year and four-year schools and improved coordination between high schools and higher education institutions offering dual-credit programs.
In addition, many Texas community colleges are participating in programs to ease the financial burden associated with postsecondary education. One such program, Dallas County Promise, offers students at 57 participating high schools “last-dollar scholarships” to cover the cost of tuition not covered by federal financial aid. The Houston-area Lone Star College district offers general scholarships to help cover the costs of tuition and academic supplies at each of its six campuses, as well as “workforce” scholarships specifically intended for students seeking to enter the workforce immediately after graduation. The Dallas-area Collin County Community College offers its students several scholarship options based on merit, financial need, degree programs and minority status.
Among the state’s four-year institutions, the University of Texas at Austin (UT-Austin) recently announced an expansion of its Texas Advance Commitment program that covers tuition and fees for students whose families earn no more than $65,000 annually; Texas A&M has a similar program in place. UT also recently received a $100 million gift from the Michael and Susan Dell Foundation to help cover living expenses for low-income freshman students. Angelo State University (ASU) offers students more than 400 scholarship programs, including the Carr Academic Scholarship program that has awarded about $100 million to incoming freshman since 1981. ASU was recently ranked as the top public university in Texas for student financial aid.
Some students get a head start on college before graduating from high school. Many Texas universities and community colleges partner with local high schools to create job training and career paths with industry-specific programs. Students pursuing this coursework can graduate with an associate degree or certificate without incurring any college debt. For example, students at San Antonio’s Fox Tech High School can earn a high school diploma and an associate degree in nursing, simultaneously.
As part of a statewide initiative to address the many challenges facing the state’s workforce and employers, the Texas Education Agency, THECB and TWC produced a 2016 report, Prosperity Requires Being Bold: Integrating Education and the Workforce for a Bright Texas Future(PDF), to highlight future training and workforce needs in the state. One recommendation of the report addressed the need for more internships and apprenticeships, which offer applied learning that benefits both employers and workers. To further this goal, the TWC created the Texas Internship Challenge to help bring Texas employers and employees together. Its website, TXInternshipChallenge.com, allows employers to post internship opportunities free of charge and gives potential employees a way to access job training and real-world experience.
Our fast-growing young population can give Texas a significant economic advantage in the next few decades, as many other states and nations face slower growth or even declines in their working-aged and under-18 populations. The degree of this advantage, however, will depend largely on how well we prepare young Texans to become qualified candidates for the positions the state’s employers seek to fill. FN
A REVIEW OF THE TEXAS ECONOMY