EXECUTIVE OFFICE OF THE PRESIDENT

COUNCIL OF ECONOMIC ADVISERS

PREPARING THE WORKERS OF TODAY FOR THE JOBS OF TOMORROW 

JULY 2009 

 
EXECUTIVE SUMMARY

In this report, the President’s Council of Economic Advisers (CEA) presents a projection of 

potential developments in the U.S. labor market over the next five to ten years and discusses the 

preparations necessary to develop the 21st century workforce. We discuss the skills that will 

likely be most relevant in growing occupations, the value and limitations of our current post-high 

school education and training systems, and the characteristics of a more effective education and 

training structure. 

At an aggregate level, the data indicate that the economy of 2016 will resemble the economy of 

2008, with several important shifts that have implications for employment. 

 Health care is forecasted to remain a large source of job growth in the labor market. 

The long-term trend toward more employment in health care is expected to continue, with 

many health care occupations, including medical records and health information technicians, 

registered nurses, clinical laboratory technicians, and physical therapists, expected to grow.

 The decades-long decline in the share of workers that are employed in manufacturing is 

expected to moderate. Some industries within manufacturing – such as aerospace and 

pharmaceuticals – are projected to create many jobs. 

 The construction industry is projected to eventually recover and add jobs in the coming 

decade. This rebuilding would generate a demand for skilled workers such as electricians 

and plumbers. 

Well-trained and highly-skilled workers will be best positioned to secure high-wage jobs, 

thereby fueling American prosperity. Occupations requiring higher educational attainment are 

projected to grow much faster than those with lower education requirements, with the fastest 

growth among occupations that require an associate’s degree or a post-secondary vocational 

award. Key attributes of a well-trained workforce as well as elements of an effective education 

and training system are detailed below. 

 Employers value workers who can think critically and solve problems. Many highlypaid occupations require workers with good analytic and interactive skills. 

 Occupations that employ large shares of workers with post-secondary education and 

training are growing faster than others. While expected growth in construction and some 

manufacturing industries would create job opportunities at all skill levels, workers will be 

better positioned for good jobs if they acquire additional training and education. Occupations 

that have grown recently require more formal post-secondary schooling than occupations that 

have declined. 

 The U.S. post-high school education and training system provides valuable skills to 

those who complete programs in high-growth fields. However, it could be more effective 

at encouraging completion and responding to the needs of the labor market. 
 ii 

 Elements of a more effective system include: a solid early childhood, elementary, and 

secondary system that ensures students have strong basic skills; institutions and programs 

that have goals that are aligned and curricula that are cumulative; close collaboration 

between training providers and employers to ensure that curricula are aligned with workforce 

needs; flexible scheduling, appropriate curricula, and financial aid designed to meet the needs 

of students; incentives for institutions and programs to continually improve and innovate; and 

accountability for results. 

Worker flexibility is key given the dynamic nature of the U.S. labor market and ongoing 

technological change. In 2003, for example, a quarter of American workers were in jobs that 

were not even listed among the Census Bureau’s Occupation codes in 1967, and technological 

change has only accelerated since then. Environmental-related occupations – which are expected 

to experience tremendous growth over the next decade – did not exist in comparable data prior to 

2000. As we build a new foundation for economic growth in the 21st century, the nation’s 

workers will be better prepared for ever-changing opportunities if they have strong analytical and 

interpersonal skills. High-quality education and training is the best way to prepare the workers 

of today for the jobs of tomorrow. 
I. INTRODUCTION

The 20th century saw rapid technological change that enhanced productivity, created new 

industries, and increased demand for skilled labor.1

 The core of our economy shifted first from 

agriculture to manufacturing and then from manufacturing to services.2

 In recent decades, 

increasing specialization and trade have blurred the lines between the domestic and global 

economies. In many industries, globalization has increased competition for jobs as workers 

around the world participate in the constant flow of goods, services and information. But it has 

also created opportunities for highly skilled workers, who now enjoy a broader markets for their 

output. Throughout the course of these fundamental changes, America’s workers have adapted 

and provided the skills and ingenuity that fueled a growing economy. 

Testing the resilience of the U.S. workforce, however, our economy slid into a recession 

beginning in December 2007 that has proven to be the worst downturn in the United States since 

the Great Depression. Already, 6.5 million jobs have been lost, and more losses are expected 

before the economy reaches bottom and employment growth returns. The recession has 

accelerated the decline of already-contracting industries, such as auto manufacturing, and has led 

to an extraordinary decline in the financial services industry that few anticipated even 18 months 

ago. We must therefore improve training and job search assistance policies to facilitate not just 

re-entry into the labor market for the unemployed, but also entry into jobs that take advantage of 

growth opportunities. 

This report examines the sectors that are expected to grow and develop over the next 

several years. The American Recovery and Reinvestment Act (ARRA) will create new 

opportunities in already-expanding industries such as health care and education, and also will 

create new opportunities in fledgling industries, such as renewable energy production and 

distribution. 

Employers demand workers who can think critically and solve problems. As a result, 

future prosperity will require greater worker investment in post-secondary education and 

training. The current U.S. education and training system offers a variety of ways in which 

workers can obtain the skills valued by employers. Many of the existing programs, particularly 

those in fields related to high-growth industries and occupations, have been shown to lead to 

improved employment and earnings outcomes. 

However, there remain important limitations to our education and training system, many 

stemming from low completion rates, limited accountability, poor coordination among different 

programs and excessive bureaucratic restrictions on the use of training funds. The report 

concludes with a discussion of the important elements of a well-functioning education and 

training system that should drive reform efforts. 

 

1

 Goldin and Katz (2008). 2

 Blinder (2006). 
II. THE ECONOMICS OF RECOVERY AND THE RETURN TO STABLE GROWTH 

Although many families may struggle over the coming months, history demonstrates that 

the U.S. economy is resilient and will recover from the current economic downturn. However, 

the growth path may not look the same as that envisioned before the recession. 

In the near term, various factors should help to stem the downturn and eventually 

increase overall production and lead to employment growth. Most obviously, the ARRA 

provides $787 billion of fiscal stimulus spread primarily over the next two years. This fiscal 

stimulus takes a number of forms: tax cuts for working families and businesses; protection of the 

most vulnerable through programs such as extended unemployment compensation; direct 

government spending on infrastructure, energy efficiency projects, and other public investments; 

and fiscal relief for state governments to help maintain key services. Taken together, the various 

forms of fiscal stimulus are expected to provide powerful upward pressure on aggregate demand 

and to aid recovery. 

The ARRA is projected to create or retain 3.5 million jobs as of the fourth quarter of 

2010.3 These jobs are projected to be in all major industries in the economy. The ARRA also 

spurs business investment, which is a key source of long-run growth, through loan guarantee 

programs and important support for new areas with excellent potential. Investments in 

renewable energy, the smart grid, and health information technology are projected to create 

many new job opportunities in a diverse set of industries spanning the service and manufacturing 

sectors. 

Two other factors are likely to aid growth in the near term.4

 One is inventory investment. 

Throughout the current recession, businesses have reduced inventory investment substantially. 

Businesses have chosen to curtail production and run down existing stocks. This behavior has 

led to a situation where even just a return to normal behavior implies a substantial rise in 

inventory investment, and thus a powerful short-run impetus to growth. Renewed inventory 

investment should spur production and job creation throughout the economy. 

The second factor that could provide near-term recovery is pent-up demand by 

consumers. The large declines in household wealth make it unlikely that consumers will return 

to their low-saving ways. But, it is possible that consumers will go through a period of 

somewhat-elevated consumption as they purchase some of the cars, appliances, and other goods 

they have put off buying since the recession began. This could provide a period of growth in the 

consumer-goods-producing sector of the economy and retail trade. 

 

3

 This estimate is relative to employment that would have occurred without the ARRA. See Romer and Bernstein 

(2009). 

4

 Romer (2009) discusses the likely growth pattern of the U.S. economy during the recovery and after the return to 

full employment. 

 2 
Over the longer run, the U.S. economy is likely to see an important rebalancing of our 

spending and production. Higher household saving rates imply that eventually other types of 

spending will need to fill the breach in aggregate demand. The most likely candidates are net 

exports and business fixed investment. 

For the past several years, low personal savings and substantial budget deficits have led 

to large inflows of foreign capital and large trade deficits. As we move to more sustainable 

levels of consumption and increased fiscal responsibility, capital inflows will naturally decline 

and the trade deficit will narrow. This rise in our net exports will likely stimulate the production 

of both manufactured goods and high-skilled services, such as accounting, law, and insurance, 

which the United States has typically exported. 

Non-housing business fixed investment is also expected to be an important source of 

growth over the next decade. Higher private saving, lower budget deficits, and lower demand for 

new homes will all tend to put downward pressure on real interest rates, and so tend to increase 

business investment. The many investment opportunities in areas such as renewable energy, the 

smart grid, and energy-saving technologies will also promote higher investment. 

In order to meet the increased demand for consumption of domestic goods and business 

investment goods, the decades-long trend of declining manufacturing employment will likely 

moderate. In addition, there will be new opportunities to expand exports in services. 

III. JOBS OF THE FUTURE

The U.S. Department of Labor’s Bureau of Labor Statistics (BLS) provides the most 

comprehensive job projections available. The BLS provides estimates for growth by industry and 

occupation, as well as detail on the education and training requirements for all occupations. 

However, the BLS projections were last published in 2007 and only incorporate information 

available through that year, before the current economic downturn and the enactment of the 

ARRA.5

 

To provide the most current information, we use a set of industry employment projections 

from the Interindustry Economic Research Foundation (IERF, or Inforum) to complement BLS 

projections of industry and occupation growth.6

 Inforum uses BLS employment data through 

 

5

 The BLS is expected to update their projections using data through 2008 in December 2009. These projections 

will estimate job growth through 2018. 

6

 Inforum, an economic forecasting and research group at the University of Maryland that has been in operation 

since 1967, employs interindustry-macroeconomic general equilibrium models to examine past employment trends 

and to forecast future employment across sectors of the economy. Their primary model, LIFT (Long-term 

Interindustry Forecasting Tool), uses a bottom-up approach to make such predictions, meaning that it uses 

component data within each of its defined industries to estimate future employment rather than starting with toplevel macroeconomic indicators. In this regard, the model is well-suited to address the questions posed in this 

report, which focus on industry-level growth. The LIFT model aggregates the North American Industry 

Classification System (NAICS) industries into 97 industries that span the economy, and uses up-to-date data from 

the monthly BLS establishment survey, which allows the model to capture trends during the current recession, 

including the potential impacts of the ARRA. 

 3 
2008 to project growth at the industry level. However, because the Inforum projections do not 

cover occupations, we supplement them with the less-current BLS occupation projections. At 

the industry level, the two sets of projections generally agree, though the difference in baselines 

(2006 for BLS and 2008 for Inforum) produces differences in predicted growth in some sectors.7

Of course, neither BLS nor Inforum can anticipate every change that will occur. For example, 

the expansion of the internet to its current level was not fully anticipated in the early 1990s. 

Thus, all interpretation of future labor market changes should be considered with caution. 

Figure 1 compares the distribution of workers across major industry groups in 2008 and 

2016 using the Inforum projections. While there is some projected movement in a few 

industries, these forecasts suggest that the industrial composition of the U.S. economy in 2016 

should strongly resemble that in 2008. 

0%

5%

10%

15%

20%

25%

Mining and

Natural

Resources

Construction

Manufacturing Retail 

and 

Wholesale

Trade

Transportation

and 

Utilities

Business 

and 

Financial

Services

Health and

Education

Services

Other 

Services

Government

2008

2016

Figure 1: Projected Distribution of Workers Across Major Industries,

2008 and 2016

Percent of year totals

Source: CEA aggregations of Inforum LIFT Model Industry Projections.

Note: Totals do not include jobs in agriculture, forestry, and fisheries.

Some important changes are projected, however. For example, the health care and 

education industries are expected to contribute most substantially to job growth in the future. 

Retail trade is projected to contract somewhat in terms of employment share, partly because the 

growth in consumer spending is expected to slow going forward. 

We next look within broad sectors to get a sense of particular, more narrowly-defined 

industries where job growth is expected. Using the Inforum projections, the private industries 

 

7

 We focus on Inforum projections through 2016 to be consistent with BLS projections. The projections from 

Inforum through 2020 are broadly similar to those through 2016 in terms of industries expected to grow. Two 

aspects of the projections in Figure 1 reflect the influence of the recent recession and therefore differ from those 

published by the BLS. First, as a share of total employment, business and financial services are predicted to decline 

substantially from their pre-recession levels. Second, the construction industry’s share of total employment is 

projected to grow, as employment in 2008 was much depressed relative to earlier years but is expected to recover. 

BLS projections from 2006 anticipated neither the decline in construction employment or the more recent collapse 

in the financial sector. As a consequence, while the BLS and Inforum projections generally agree about long-run 

trends, they diverge with respect to these two sectors. 

 4 
that exhibit the largest net growth from 2008 to 2016 are depicted in Figure 2.8

 We exclude the 

government sector, which is not projected to grow notably in its share of overall employment. 

The subsectors depicted in Figure 2 are forecasted to account for 86% of job growth among all 

industries with positive job growth though 2016 and are key sources of job opportunities for new 

and incumbent workers. 

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000

Other medical services & dentists

Construction

Private hospitals

Restaurants and bars

Education, social services, NPO

Physicians

Wholesale trade

Nursing homes

Other business services

Air transport

Figure 2: Projected Employment Changes in Industries Adding the Most 

Jobs, 2008-2016 Annual number of additional jobs projected

Source: Inforum LIFT Model Industry Projections. NPO are nonprofit organizations.

Health care dominates the list in Figure 2, with the subsectors of nursing homes, 

physician offices, and hospitals growing strongly. “Other medical services and dentists,” which 

is a broad category including the ever-expanding home health care, outpatient care, and medical 

and diagnostic laboratories subsectors, is expected to add the most jobs. 

But there are also non-health-care industries in the list, creating a broad set of 

opportunities for workers. Figure 2 shows strong growth in construction. This is a broad 

industry that includes the construction of manufacturing and retail buildings, roads and bridges, 

utility systems, and homes. The ARRA will contribute to construction employment growth in 

the next few years through direct investments and incentives for private investment in 

infrastructure, the construction of power and communication structures, and the weatherization 

of homes. Another area of growth is air transport. An important occupation in this industry is 

aircraft mechanic and service technician (see box on next page).9

 

 

8

 The specific industries that the BLS projects to add the most jobs are similar to those projected by Inforum. For 

example, the 10 industries with the greatest employment growth according to the BLS include food services and 

drinking places, office of health practitioners, construction, management, scientific, and technological consulting 

services, individual and family services, private hospitals, employment services, retail trade, residential care 

facilities and computer systems design and related services. 

9

 Descriptions of occupations in the text boxes rely on information from the BLS Occupational Outlook Handbook

(http://www.bls.gov/OCO/). For reference, the median earnings for all occupations in 2008 were $32,390. 

 5 
While manufacturing overall is projected to 

continue to decline as a share of total employment, 

several manufacturing subsectors – such as 

aerospace and drugs, along with other similarlyadvanced manufacturing industries – are anticipated 

to grow (but not enough to make the list in Figure 

2). The jobs in these industries are varied. For 

example, the major occupations in aerospace 

include assemblers (aircraft structure, surfaces, 

rigging, and systems), service technicians, and 

mechanical drafters. Drug manufacturing jobs 

include packaging and filling machine operators, 

chemists, and medical scientists. Other areas of 

advanced manufacturing expected to grow will 

employ industrial machinery mechanics and 

mechanical drafters. 

Job Spotlight: Aircraft Mechanics 

2008 median earnings: $51,390 

Within the air transport industry, aircraft 

mechanics and service technicians are 

responsible for keeping aircraft and equipment 

in working order. Engines, landing gear, 

avionic instruments, and accessories require 

constant inspection and maintenance. The 

work of such mechanics is fast-paced as flight 

schedules need to be maintained. 

Aircraft mechanics usually must attend schools 

that are approved by the Federal Aviation 

Administration. Certified mechanics usually 

attend school for 18-24 months and are 

expected to demonstrate knowledge of the 

operation of aircrafts. The job outlook for the 

next decade is good, with thousands of new 

jobs being created. 

IV. A CLOSER LOOK AT TWO KEY AREAS 

OF GROWTH

We next turn to the BLS occupation projection data in order to provide more specifics 

about particular areas of high demand. These areas are sources of both near-term and future job 

growth. We begin with health care, which has continued to add jobs even during the recession. 

Investments in ARRA, especially in health information technology, will create additional 

opportunities for workers. We then discuss occupations associated with clean energy and the 

environment. The Occupation Information Network (O*Net) lists energy as a high-demand 

industry cluster.10 Many occupations that are involved in the production and distribution of 

energy are also occupations BLS projects to grow quickly. Recent investments in the ARRA that 

focus on the production of renewable energy will likely only increase demand in this area. 

Health Care 

Figure 3 uses BLS Employment Projections data to illustrate the rapid growth in health 

care employment from 2000 to 2006; the figure also shows that this trend is expected to continue 

and likely accelerate through 2016.11 Health care practitioners and technicians, which include 

physicians, registered nurses, and other health professionals and technicians, are expected to be 

in increasing demand. Jobs for medical records and health information technicians (see box on 

next page) are also projected to increase. Investments in health information technology will 

only accelerate the growth in this occupation. 

 

10 See http://online.onetcenter.org for O*Net’s complete list of high-growth industry clusters. 11 We recognize that the recession and recovery will likely alter BLS projections, but we anticipate that the general 

trends in this section will continue, particularly for non-cyclical sectors like health care. 

 6 
Health practitioners

Other occupations

Health care support

90

100

110

120

130

140

150

160

2000 2006 2016

Sources: "Occupational Employment Projections to 2010." Bureau of Labor Statistics. Monthly Labor Review . 

November 2001. "Occupational Employment Projections to 2016." Bureau of Labor Statistics. Monthly Labor 

Review . November 2007.

Figure 3: Actual and Projected Growth of Health-Related Occupations vs All 

Other Occupations, 2000-2016

48% Growth 2000 - 2016

35% Growth 2000 - 2016

12% Growth 2000 - 2016

Employment Index (2000=100)

Job Spotlight: Medical Records and 

Health Information Technicians 

2008 median earnings: $30,610 

Medical records and health information 

technicians assemble patients’ health 

information, maintain records of 

observations, medical interventions, and 

treatment outcomes, and evaluate these 

records for completeness and accuracy. 

With a growing number of tests, treatments, 

and procedures that will be increasingly 

scrutinized by health insurance companies, 

regulators, and consumers, significant job 

growth is expected in the coming years. 

Generally, medical records and health 

information technicians have an associate’s 

degree. 

Jobs in health care support occupations, also shown in the chart, are projected to 

experience even faster growth. The increased demand in this area stems largely from an aging 

population that will require care at home, at nursing 

care facilities, and in inpatient and outpatient settings. 

Support occupations that will likely grow in 

importance are physical therapists, physical therapist 

assistants, medical social workers and home health 

care aides. 

We emphasize that this expected growth in 

health care occupations does not account for 

comprehensive health care reform. Health care reform 

is expected to slow the growth rate of health spending 

as efficiency is improved. However, even with a 

slower growth rate of spending, the expected 

expansion of health coverage could lead to increased 

demand for workers – including physicians, nonphysician clinicians, health care support workers and 

nurses – to cover the newly insured population. 

A Clean Energy Future 

Another set of occupations with strong growth potential are in fields related to clean 

energy production and environmental protection. There are growing opportunities in these 

fields, particularly for workers with technical skills. 

 7 
Job Spotlight: Environmental Engineering 

Technicians

2008 median earnings: $41,100 

Environmental engineering technicians test and 

operate equipment that is used in the control 

and remediation of environmental pollution. 

They work closely with engineers and scientists 

and are employed in a wide variety of 

industries, including architectural and 

engineering service firms, as well as technical 

consulting services. 

The job of engineering technician typically 

requires completion of a two-year program at 

an accredited institution of higher education. 

Community colleges and technical institutes 

offer these programs. Among all engineering 

technicians, growth in environmental-related 

jobs is projected to be the fastest. 

For example, Figure 4 shows the past and future growth of environment-related 

occupations compared with all other occupations between 2000 and 2016. The environmentrelated jobs we consider are environmental 

engineering technicians (see box), environmental 

engineers, environmental scientists and specialists 

(including health), and environmental science and 

protection technicians (including health). Clearly, 

the U.S. labor market is already becoming 

increasingly “green” through the growth in these 

occupations. Jobs devoted to environmental 

improvement grew far faster than other 

occupations from 2000-2006 and the BLS projects 

fast relative growth through 2016. 

These environmental jobs account for only 

a small fraction of a growing list of occupations 

and industries that are becoming increasingly 

devoted to clean energy production, energy 

efficiency, and environmental protection. 

Investments in the ARRA will also help support 

jobs that will improve the energy efficiency of 

homes and buildings, adding to the already strong growth expected in construction. Investments 

in renewable energy will add employment to industries as diverse as wind turbine manufacturing 

and agriculture.12 Distributing power through an updated, more efficient, system will require 

even more electrical power line installers and repairers (see box on next page), which was 

already a growing occupation according to the BLS projections. 

90

100

110

120

130

140

150

160

2000 2006 2016

Figure 4: Actual and Projected Growth of Environmental-Related 

Occupations vs All Other Occupations, 2000-2016

Sources: "Occupational Employment Projections to 2010." Bureau of Labor Statistics. Monthly Labor Review. 

November 2001. "Occupational Employment Projections to 2016." Bureau of Labor Statistics. Monthly Labor 

Review . November 2007.

EnvironmentalRelated Occupations

All Other Occupations

52% Growth 2000 - 2016

14% Growth 2000 - 2016

Employment Index (2000=100)

 

12 As with the ARRA investments overall, government spending through the ARRA that supports “green” initiatives 

should be viewed as a boost to an industry that was already growing. This growth was stalled by the recession but 

the ARRA is expected to move the industry back toward its pre-recession growth path. 

 8 
Although it is currently hard to classify 

“green” jobs as they cross standard industry and 

occupation definitions, the BLS has begun to 

consider a new classification system to learn more 

about these jobs.13 This will allow researchers to 

track changes in this rapidly evolving sector. 

Job Spotlight: Electrical Power Line 

Installers and Repairers 

2008 median earnings: $55,100 

Electrical power line installers and repairers

work on the networks of wires and cables 

that carry electrical power from generating 

plants to customers. The occupation requires 

at least a high school diploma. To become 

proficient, line installers and repairers often 

complete several years of long-term on-thejob training, formal apprenticeships, and 

some classroom work. Other qualifications 

include basic knowledge of algebra and 

trigonometry, as well as good reading and 

writing skills. Physical fitness is also highly 

valued, as workers must be able to climb, lift 

heavy objects, and do other activities that 

require strength, stamina, and coordination, 

often while balanced on poles and towers. 

CEA analysis suggests that particular areas 

of “green” potential (e.g., wind and turbine 

manufacturing, mass transit, or producing energyefficient automobiles) pay more on average than 

otherwise comparable jobs. They also are more 

likely to be held by primary earners in the household 

and to be unionized.14 

V. SKILLS FOR GOOD JOBS

Of particular concern is the future of good 

jobs, those that pay high wages and provide a ticket 

to the middle class. In today’s economy, these jobs disproportionately employ workers with 

education and training beyond the high school level. For example, most of the occupations 

highlighted in the previous section, such as aircraft mechanic and environmental engineering 

technician, offer wages that, on average, are well above the median in our economy, and require 

at least some post-secondary training. 

These educational requirements reflect a need for highly skilled workers who can 

perform complex, ever-changing tasks. Economists have classified the intensity of five types of 

tasks across occupations using the Dictionary of Occupational Titles (DOT).15 The taxonomy 

gauges the degree to which each occupation uses non-routine analytic skills (such as 

mathematics, used by architects), non-routine interactive skills (directing and planning, used by 

school teachers), routine cognitive skills (adhering to strict limits or standards, used by 

machinists), non-routine manual skills (physical coordination, used by fire fighters), and routine 

manual skills (manipulating objects with fingers rapidly, used by tool and die makers). 

The modern economy requires workers with higher skills than in the past. Figure 5 shows 

the skills taxonomy applied directly to occupations that have recently grown and declined in 

terms of shares of total employment.16 Occupations that have grown require a greater intensity 

 

13 See http://www.dol.gov/dol/budget/2010/PDF/CBJ-2010-V3-01.pdf for a description. 14 Middle Class Task Force (2009). 

15 Autor, Levy, and Murnane (2003). 

16 Specifically, we used data on task intensity that are publicly available from Autor, Levy, and Murnane (2003) via 

the first author’s web site (http://econ-www.mit.edu/faculty/dautor/data/autlevmurn03). These data include each 

occupation’s skill intensity (one average for each of the five tasks). We assign each worker in the March Current 

Population Survey (CPS) from 1992 – 2002 a skill level for each of the five tasks based on the longest occupation he 

or she held in the previous year. From 1992-2002, a consistently-measured set of occupations and industry 

definitions were used in the CPS, thus allowing for consistent comparisons across occupations that are growing and 

 9 
of non-routine analytic and interactive tasks, such as frequent use of mathematics and high 

executive functioning, than do occupations that have been in decline, which are more reliant on 

manual and routine tasks. This is also reflected in industrial shifts: physicists and registered 

nurses are prevalent in the fast-growing higher education, science, and health care industries, 

while textile workers are in declining industries. Food technologists and elementary school 

teachers are part of quickly-growing industries, while tool grinders and sharpeners are in those in 

decline. Thus, while many good, middle-class jobs in the past required only proficiency in welldefined tasks – e.g., operating a rotary drill – the U.S. labor market has been moving toward jobs 

that require skills that enable workers to flexibly complete tasks that are uncertain and 

interactive. 

0

1

2

3

4

5

6

Non-routine analytic Non-routine

interactive

Routine cognitive Non-routine manual Routine manual

Figure 5: Task Intensity of Declining vs Growing Occupations, 1992 - 2002

Task intensity scale

Source: CEA calculations using data on task intensity from Autor, Levy, and Murnane (2003) and CPS data.

Declining

Growing

Although “interactive” skills, such as effective communication and the ability to work 

well with others, have not traditionally been studied, nor perhaps valued, by educators, there is 

growing awareness of their importance for adult success. Researchers have highlighted the 

growing importance of “non-cognitive” skills in the labor market and argue that a range of 

behaviors that reflect “greater student self-awareness, self-monitoring, and self-control” are key 

indicators that students are able to effectively learn and succeed in a modern post-secondary 

environment.17 

These results match employer reports as well. In 2006, The Conference Board released 

the results of a survey of over 400 employers concerning the readiness of new entrants into the 

labor force.18 Employers noted that professionalism/work ethic, teamwork/collaboration, oral 

 declining. A growing occupation is one with a positive annual average growth rate in share of total employment 

(with total employment measured by all individuals reporting an occupation held in the previous year). Declining 

industries are the remainder. 

17 See, for example, Heckman, Stixrud, and Urzua (2006) and Roderick, Nagaoka, and Coca (2009). 18 The Conference Board (2006).

 10 
communication, and critical thinking/problem solving are among the most important skills labor 

market entrants need. 

Importantly, post-secondary education and training can provide the cognitive and 

interactive skills required for good, high-paid, jobs. Analysis of data from the Current 

Population Survey (CPS) indicates that occupations with a high intensity of analytic and 

interactive skills tend to have large shares of workers with post-secondary education.19 

Moreover, occupations with a high concentration of college-educated workers have been 

growing much faster than others. 

This analysis is consistent with another set of results from the employer survey conducted 

by The Conference Board. Respondents noted that graduates from two- and four-year college 

programs were on average better prepared to meet the challenges of the labor market than high 

school graduates. Specifically, those with only a high school degree were reported to be 

deficient in professionalism/work ethic and critical thinking/problem solving.20 

The Conference Board also found that their survey respondents believed most recent high 

school graduates lacked the basic skills of reading, writing, and math that were deemed 

necessary by employers. Among these basic skills, employers deemed this group to be most 

deficient in writing. Employers judged nearly three-quarters of high school graduates as unable 

to write at a basic level, for which competency includes knowledge of both spelling and 

grammar. These rudimentary skills, combined with the applied skills of problem solving and 

interacting with others, are critical for workers in the current labor market according to Donna 

Klein, President and CEO of Corporate Voices for Working Families (a sponsor of The 

Conference Board Report).21 One member of the President’s Economic Recovery Advisory 

Board (PERAB) echoes this view in reporting that one-half of the job applicants to his large 

company cannot do basic 8th grade math. Other members of the PERAB report that many 

workers do not possess the basic reading and math skills necessary for even entry-level work.22

The occupational demands of the future are expected to require skills obtained through 

post-secondary education and training. Figure 6 shows that occupations requiring higher 

educational attainment are projected (using the BLS forecasts) to grow much faster than those 

 

19 We obtain this result by pooling occupation means of education (share with some college or more and share with 

a bachelor’s degree or more), age, union status, metropolitan status, and proportion female for the longest jobs held 

in the previous year by respondents in the 1992 – 2002 March CPS samples. We merge these to the Autor, Levy, 

and Murnane (2003) skill intensity levels for each occupation. We then regress each skill intensity individually on 

the education measure(s) and the other control variables. We include first the share with some college alone as the 

sole education indicator. We then include share with bachelor’s degree or greater as an additional control. The 

result of a strong positive relationship between analytic skills and share with some college education, as well 

between interactive skills and share with some college education holds even when the share in the occupation with a 

bachelor’s degree is held constant. 

20 The Conference Board (2006). 

21 See http://www.21stcenturyskills.org/index.php?option=com_content&task=view&id=250&Itemid=64. 22 The President’s Economic Recovery Advisory Board (PERAB) is comprised of business, labor and academic 

leaders and provides the President with non-governmental insight to enhance the nation’s economic strength and 

competitiveness. Given the importance of a skilled workforce to American businesses, the PERAB has begun an 

examination of the training needs of the American workforce. 

 11 
with lower education requirements. The categories with some education required beyond high 

school are growing faster than those not requiring post-secondary schooling. The growth is not 

solely among occupations requiring bachelor’s degrees; occupations that require only an 

associate’s degree or a post-secondary vocational award are actually projected to grow slightly 

faster than occupations requiring a bachelor’s degree or more. 

0% 6% 12% 18%

Bachelor's degree or more

Associate's degree or

postsecondary vocational

award

Experience or long-term

training

Medium or short-term

training

Source: BLS Occupational Employment Projections, press release (Table 9).

Figure 6: Projected Employment Growth from 2006-2016 by Occupation's 

Education or Training Requirement

Percent growth

VI. Evidence on the Effectiveness of the Major Components of the Current U.S. PostHigh School System 

The previous section indicates that skills obtained after high school are central to 

workforce preparedness. The U.S. system of post-high school education and training has a 

diversity of options to obtain these skills, including four-year colleges, community colleges, 

private two-year colleges, public and private vocational-technical institutions, community-based 

organizations, and formal apprenticeship programs. These options provide flexibility, allowing 

those who seek to prepare for academic degrees the foundation to do so while also allowing 

those adults who need it to improve their basic skills and complete a post-secondary certificate or 

degree. It also has options for those workers seeking to upgrade their skills or retool mid-career. 

While the current system offers many education and training options, important questions 

to ask are whether participants benefit and whether there are ways in which the system can be 

improved. This section of the paper reviews the evidence on the effectiveness of the current 

post-secondary system with the first question in mind. In the next section, we discuss important 

avenues for future improvement. 

Evidence on Effectiveness

In many respects, we know by the “market test” that individuals acquire valuable skills 

through the current U.S. system of education and training: employers are willing to pay more for 

 12 
workers with more education. Over the past two decades economists have carefully documented 

that individuals earn about 10% more for each additional year of schooling they complete.23 

While it is widely known that there is a positive gain to attending a four-year college, it is less 

well known that other forms of post-secondary schooling provide similar returns.24 For this 

reason, this section focuses on the effectiveness of education and training delivered outside of 

the four-year college setting. 25

Community Colleges 

The Community College: The 

Quintessentially American Institution 

Community colleges serve many students who 

otherwise would not have a place in higher 

education. Traditionally “open door” institutions 

(typically any one with a high school degree or 

who demonstrates “an ability to benefit” can 

attend), community colleges serve traditionalcollege-aged individuals who aspire to a 

bachelor’s degree but may not be prepared for a 

four-year college or find the lower cost 

attractive; those who aspire to receive a two-year 

associate’s degree, or a certificate; and those who 

want to take only a class or two. They provide 

“option value” for students who are not sure they 

are college material but would like a low-cost 

opportunity to “try it out.” And, they serve as an 

important educational option for the growing 

numbers of older and “non-traditional” students. 

Approximately 35% of college students, 

35% of individuals receiving job training through 

the Workforce Investment Act (WIA), and a 

notable proportion of adults attending adult basic 

education (ABE), General Education Development 

(GED), and English as a Second Language (ESL) 

classes are enrolled in a community college.26 

Researchers have estimated that attending a 

community college significantly increases 

earnings, regardless of whether an individual 

completes a degree.27 

However not all of the degrees and 

certificates awarded by community colleges – 

ranging from engineering technician or nursing 

assistant to bricklayer or automotive mechanic – 

have the same value.28 Rather, research suggests 

that the most valuable credentials are those in 

quantitatively-oriented fields or high-growth/highneed occupations such as health care.29 Similarly, 

evidence from Washington State suggests that 

displaced workers who attend a community 

college substantially increase their long-term 

earnings compared to those who do not. Again, 

the benefits are greatest for academic courses in 

math and science as well as courses related to the 

health professions and other technical fields.30 

These findings point to a powerful role for 

In fulfilling these myriad of roles, community 

colleges are both part of the “formal” higher 

education system as well as part of the workforce 

development system (i.e., “job training”). 

Further, over 79% offer contract training in 

which they work directly with the public sector, 

employers and other clients (such as prisons) to 

develop and provide training for specific 

occupations or purposes (GAO, 2004). In many 

respects community colleges are the epicenter of 

the U.S. post-high school education and training 

system. 

 

23 Ashenfelter and Rouse (1999), Heckman and Krueger (2003). 

24 Kane and Rouse (1999). 

25 We do not discuss training provided by community-based organizations and vocational-technical institutes largely 

because there is little good evidence about its effectiveness. 26 U.S. Department of Education (2008), U.S. Department of Education (2005) (calculated from Table 192), and 

U.S. Government Accountability Office (2005) (page 25). 

27 Kane and Rouse (1999), Marcotte et al. (2005). 

28 U.S. Department of Labor.

29 Jacobson and Mokher (2009). 

30 Jacobson, LaLonde, and Sullivan (2005). 

 13 
community college education in helping displaced workers through the current economic 

downturn, particularly if they take classes in fields related to high-growth industries and 

occupations. 

Federal Training Programs 

According the U.S. Office of Management and Budget the Federal government currently 

spends over $16 billion on job training and employment services, largely under the Workforce 

Investment Act. WIA funds training provided in a variety of settings. According to a 

Government Accounting Office (GAO) study, about one-third of individuals receiving training 

under WIA do so at community colleges, another third attend proprietary schools, while the rest 

use four-year colleges, community-based organizations, and public vocational and technical 

schools, and other providers.31 

Research suggests that WIA participants benefit from the program, on average, although 

quality is uneven. A recent study found that WIA training programs for adults boosted 

employment and earnings, on average, although there was substantial variation across states. A 

similar pattern of results, with slightly smaller earnings gains, was observed for the dislocated 

worker program.32 There is also growing evidence from state programs that training for adults 

can have large positive impacts on earnings, particularly in studies that track participants for a 

longer period of time.33

As discussed in the previous section, employers currently bemoan the lack of basic skills 

in the U.S. workforce, and individuals without such skills have a hard time adapting to the everchanging U.S. workplace. The three components of the U.S. post-high school education and 

training system that focus on basic skills – adult basic education, GED, and English as a Second 

Language programs – are therefore critical as they provide a means by which students age 16 and 

older and immigrants can improve basic skills in reading, writing, and arithmetic and Englishlanguage proficiency.34 

Studies have found that the GED may carry a labor market premium, albeit one that may 

be smaller than that associated with a regular high school diploma.35 Recent studies of ABE and 

ESL programs report that ABE/ESL instruction is associated with small, positive short-term net 

 

31 U.S. Government Accountability Office (2005). 

32 Heinrich, Mueser, and Troske (2008). In addition, the Federal government also currently spends over $2.5 billion 

on training programs for disadvantaged youth. Training in the most intensive of these programs − Job Corps and the 

National Guard’s Youth ChalleNGe program − is provided by contract to private companies as well as other 

agencies, including the military. The most rigorous research strongly suggests that to the extent programs work for 

this population, they must be intensive (and are therefore expensive). See Schochet, Burghardt, and McConnell 

(2008) and Bloom, Gardenhire-Crooks, and Mandsager (2009). 

33 Hotz, Imbens, and Klerman (2006), Dyke et al. (2006). 

34 Over 3,100 such adult education programs, serving about 2.7 million adult learners in 2008, are funded under the 

Adult Education and Family Literacy Act (AEFLA). The actual instruction for these programs is provided by 

various providers, including Local Education Agencies (LEAs), community colleges, community-based 

organizations, and correctional institutions (Tamassia et al., 2007)). 

35 Tyler and Lofstrom (2009), General Education Development Testing Service of the American Council on 

Education (2008). 

 14 
impacts on hourly wages, hours worked, and quarterly earnings for participants, although longerterm impacts are more mixed.36 

That Federal training programs improve participants’ labor market outcomes indicates 

they provide skills valued by employers. They have a valuable role in helping displaced workers 

regain employment in the short-term and in helping adults obtain and refresh their skills in the 

face of an ever-changing workplace. That said, the Federal system of job training could be much 

more effective. 

Room for Improvement: Completion or Lack Thereof

The research indicates that individuals gain valuable skills in post-secondary education 

and training programs, particularly at community colleges, but there are problems in the system. 

One of the most important is relatively high drop-out and non-completion rates. Among students 

who first enrolled in a public four-year college, 78% had attained an academic degree or were 

still pursuing a degree six years later; the percentage drops to only 53% for those who first 

enrolled in a public two-year college.37 Low program completion rates also plague adult basic 

education programs.38

A key factor impeding program completion is a lack of preparedness. In 2001 nearly 

one-third of first-year college students in the United States needed to take remedial classes in 

reading, writing, or mathematics, at an estimated cost of over $1 billion annually. Those who 

require remedial classes are much less likely to complete their degree than those who do not.39 

Another common complaint across several types of adult education and training 

programs is that ineffective curricula lead to student disengagement. Although data are limited, 

anecdotal work suggests that “drill-and-skill” teaching methods, rather than those that build 

motivation and encourage inquiry by applying skills learned in the classroom to later academic 

and vocational activities, remain the dominant form of pedagogy.40 

Of course there are other factors contributing to poor completion. A dizzying array of 

course options leave many students confused about which classes would lead to a credential or 

provide for a smooth transfer to a four-year institution. The overall lack of clarity and guidance 

 

36 See Washington State Workforce Training and Education Coordinating Board (2008), Hollenbeck and Huang 

(2006), and Cho and Tyler (2008). 

37 Among students who enrolled in community college, only 50% of those that enrolled with the goal of completing 

a certificate, 47% of those with a goal of earning an associate’s degree, and 45% of those that had enrolled with the 

goal of earning a bachelor’s degree (or transferring to a four-year college) actually fulfilled their goal or were still 

actively pursuing their degree. These estimates are from the Beginning Postsecondary Students Longitudinal Study 

(1996-2001) and were generously provided by David Bergeron. 38 A recent survey of adult education programs finds that over 25% of adult learners enrolled in ABE, ASE, or ESL 

leave before completing the program. Furthermore, learners who do complete these programs may be participating 

for an inadequate amount of time. On average, adult learners reported having spent only somewhere between 80 and 

100 hours in programs, and of those learners, only one-third gained one or more educational levels during the year 

(Tamassia et al., 2007)). 

39 Bettinger and Long (2007). Breneman and Haarlow (1997). “Remedial Education: Costs and Consequences.” 

Remediation in Higher Education. Washington, D.C.: Thomas B. Fordham Foundation. 

40 Grubb and Associates (1999), as discussed in Levin and Calcagno (2007).

 15 
when it comes to course selection and degree planning can overwhelm and frustrate students, and 

thereby impact their probability of success.41 Research appears to suggest that overcrowding 

also inhibits attainment, particularly when the result is that students are unable to register for 

required classes.42 Decaying and outdated facilities is a problem in other places where 

classrooms have not been updated or renovated to meet the current needs of students.43 

Finally, costs figure prominently into the attendance and persistence decisions of 

prospective students. Not only is tuition a burden but a growing proportion of post-secondary 

students are non-traditional, a category which includes those students that are older-than-typical, 

financially independent, and attending school part-time. These students are substantially less 

likely to complete bachelor’s degrees than are traditional students.44

VII. Elements of a More Effective Post-High School Education and Training System 

A stronger post-high school education and training system would recognize that 

education is a life-long endeavor, with each component a natural continuation of the high-quality 

education that preceded it. The foundation would be a high quality early childhood, elementary, 

and secondary education system. Post-secondary students would have access to timely and 

appropriate financial aid to help finance the cost of education and training. Further, all 

components would share common – or aligned – goals and the classes and programs would be 

cumulative. 

As students juggle many responsibilities, education and training in such a system would 

be provided in a flexible manner with appropriate services to help students stay in school. 

Programs would be built on appropriate and innovative curricula and pedagogy, and those that 

are occupationally-focused developed in close collaboration with local employers and other 

workforce stakeholders. The funding streams and reporting requirements of Federal and state 

workforce programs would allow for innovation in the delivery of services. Finally, programs 

and institutions would have an incentive to continually improve and would be held accountable 

for their results. These critical elements apply to individual programs and institutions, as well as 

to Federal and state workforce systems. We elaborate below. 

 The most important “post-high school” education and training reform is a strong early 

childhood and elementary and secondary education system. 

While the focus of this report is on the post-high school education and training system, 

the first step to a highly skilled workforce is a high-quality early childhood, elementary and 

secondary education system that provides children with the basics they need to thrive in postsecondary education and in the workplace. 

 

41 Rosenbaum, Deil-Amen, and Person (2006). 

42 For example, research by Bound and Turner (2007) strongly suggests that a significant portion of the recently 

documented lengthening time to degree among college students can be explained by overcrowding, particularly for 

community college students. 

43 Community College Times, June 4, 2008. 44 Horn and Carroll (2004). U.S. Department of Education (1996). 

 16 
A growing body of rigorous evidence suggests children who attend high quality preschool are more likely to complete more years of education, attend four-year colleges, go on to 

hold skilled jobs, and earn higher wages.45

Strong elementary and secondary schools are the next building block of a strong 

foundation for future workforce success. At each level, effective principals and teachers are at 

the core of helping students to master new material and mature into creative, highly capable, 

responsible adults. Along with quality instruction, high standards, rigorous assessments, and 

strong accountability can also significantly improve academic performance.46 The secondary 

school goals and curriculum must be aligned with the goals and curricula of post-high school 

institutions. This alignment can occur through rigorous academic standards and accountability. 

In addition, programs such as “Tech-Prep” and “2+2” that either allow students to acquire 

college credit while still in high school or to start a four-year (often technical) program during 

the last two years of high school and then continue through two years of community college can 

help to bridge the gap between secondary school and post-secondary education and training. 

 All students should have access to financial support to improve valuable workforce skills. 

While the Federal government currently makes over $21 billion in grants, $7 billion in 

tax credits, and $67 billion in student loans available each year, the Free Application for Federal 

Student Aid (FAFSA) is overly cumbersome and time-consuming.47 As a result, over a million 

students are estimated to be eligible for aid but do not even apply.48 Simplification of the form 

will improve access to higher education and training for many deserving students.49 More 

generally, much of the currently available financial aid is marketed around the needs of 

traditional students as opposed to older, working students who are enrolled part-time. In order to 

engage in lifelong learning, students need to know how to access today’s financial aid programs 

in ways that address their changing needs. 

 The goals of components of the post-high school system should be aligned and the 

curriculum cumulative. 

 Many individuals go through multiple spells of attendance at various post-secondary 

institutions and the resulting credits frequently do not add up to a meaningful credential or 

degree.50 One approach to helping students put together courses that generate marketable skills 

even if the student is not continually enrolled is “career pathway” (or “career cluster”) programs. 

These programs typically involve a careful map of required courses and training, designed to be 

internally coherent and linked to the demands of specific jobs. Career pathways can begin as 

early as middle school and can include accelerated programs that blend basic skills and 

occupational training. 

 

45 See, for example, Barnett (2008). 

46 See, for example, Rouse et al. (2007). 

47 The College Board (2008). 

48 The Institute for College Access & Success (2007). 

49 Dynarski and Scott-Clayton (2007). 

50 U.S. Department of Education. (2002). 

 17 
One example of a career pathway approach is Washington State’s Integrated Basic 

Education and Skills Training (I-BEST) program, which is currently offered in all of its 34 

community colleges (see box). I-BEST incorporates more than 100 distinct tracks, each building 

toward a degree or certificate and designed to prepare students for employment in a variety of 

fields.51

Washington State’s I-BEST Program 

Washington State’s Integrated Basic Education and Skills 

Training (I-BEST) programs build toward degrees and 

certificates and prepare students for employment in fields 

including commercial driving, nursing assistance, 

manufacturing, automotive technology, corrections, early 

childhood education, and office reception work. 

I-BEST requires that at least 50% of classroom time 

include both literary and workforce training 

simultaneously, with both instructors in the room. For 

example, an I-BEST student in a nursing program might 

learn technical medical language, while having an 

English instructor on hand to aid in general vocabulary 

development. 

In addition to basic skills and workforce training, I-BEST 

can establish a pathway toward an associate’s degree. IBEST programs also include guidance and advising to 

help mitigate barriers to success such as limited English 

vocabulary, housing affordability, lack of reliable 

transportation, and child care issues. To provide such 

services each campus has an I-BEST coordinator to 

provide one-on-one contact with students and help guide 

them through the educational system and identify needs 

and next steps. 

 Education and training should be provided in a flexible manner with an appropriate 

curriculum and students should have access to adequate levels of support services. 

Another common element of 

successful programs is that they are based 

on appropriate curriculum and pedagogy. 

Washington State’s I-BEST program, for 

example, blends basic skills and 

occupational training to generate more 

contextualized learning, where traditionally 

these have been segregated into distinct 

programs. The result is a more effective 

approach to teaching adults who need both 

basic skills and job skills. A recent 

analysis conducted by researchers at the 

Community College Research Center at 

Columbia University’s Teachers College 

suggests that it is highly effective. I-BEST 

students were far more likely than similar 

basic skills students to improve basic skills 

and earn college-level credits.52 As 

another example, Alan Krueger and Cecilia 

Rouse studied a workplace education 

program that also taught basic skills in an 

occupational context.53 The authors report 

positive impacts on earnings, job 

promotion, performance awards, and job

attendance. 

improve attendance and completion.54 We highlight that both I-BEST and the sectoral training 

 

Many students must juggle different responsibilities, are the first in their family to attend 

a post-secondary institution, or have been out of school for an extended period. This imposes 

unique demands on the education and training system, and an adequate student support service 

system is another element of effective post-high school education and training programs. Results 

from a randomized study in two community colleges indicate that enhanced counseling can 

51 Washington State Board for Community and Technical Colleges. 

52 Jenkins, Zeidenberg, and Kienzl (2009). 

53 Krueger and Rouse (1998). 

54 Scrivener and Au (2007), Scrivener and Pih (2007). 

 18 
programs described below include additional counseling and support services (e.g., child care, 

transportation, and housing). 

 The curricula for occupationally-oriented programs should be developed in close 

collaboration with local employers and other workforce stakeholders. 

One of the great virtues of many “sub-baccalaureate” training providers – such as 

community colleges – is that they can be nimble allies of employers and other workforce 

partners in providing customized training that is specific to the needs of a particular employer or 

industry. Individual members of PERAB have also emphasized that in order for programs to be 

more effective they must be focused on industry needs and allow “ownership” at the company 

level in order to foster a greater tie-in with local economic development authorities. Clearly, 

collaboration between training providers and employers is important for ensuring that the skills 

students acquire are those employers need. 

Sector-focused training programs that attempt to organize employers within an industry 

to address its workforce needs through well-targeted training programs are one promising 

approach to fostering such collaboration. Public/Private Ventures recently released a 

randomized study of the effectiveness of such programs for low-income workers. The study 

finds that participation in the skills-training programs increased wages and earnings, raised the 

probability and consistency of employment, and led to work in higher-quality jobs.55 Many 

program participants obtained jobs in targeted sectors. They also believed the programs helped 

them achieve success in the labor market, with 78% saying the program had improved their 

chances of getting a job.56

Apprenticeship programs, currently most common in construction, manufacturing, public 

safety and some military occupations, provide another excellent source of training that is 

developed with the needs of both the worker and employers in mind.57 Individual employers, 

groups of employers, or joint union-employer groups sponsor and design the curriculum and 

organize the actual training. The programs are then registered with either the Federal Office of 

Apprenticeship or a state apprenticeship agency. These programs often offer basic skills training 

that is taught in the context of the needs of a particular employer (or employers). While still 

small compared to other countries, apprenticeships in the United States provide valuable training 

to an increasing number of individuals. Indeed, a recent study of apprenticeship programs in 

Washington State finds that, following training, participants earned substantially more than a 

group of similar non-participants.58 

 The Federal job training system needs to be simplified and made more coherent. 

Many of the components of the Obama Administration’s vision of a well-functioning 

post-high school education and training system cannot be achieved with the current, often 

conflicting and confusing, maze of job training programs spread across several Federal agencies. 

 

55 Maguire et al. (2009). 

56 Roder, Clymer, Wyckoff (2008). 

57 Lerman (2009). 

58Hollenbeck (2008). 

 19 
For example, as discussed above, one of the more promising curricular innovations that helps to 

improve student success is “contextualized learning,” in which adults obtain basic skills in the 

context of occupational training. Not only does this allow the students to progress through the 

programs more quickly but it also helps to keep them engaged with relevant examples and 

applications. However, the Federal system can be a hindrance to the development of such 

programs. Representatives from Washington State report to CEA that it is very difficult to fund 

their I-BEST program with Federal dollars because basic skills and occupational training are 

funded under different streams, each with its own requirements and restrictions. 

A new initiative in Michigan provides another example of the sort of innovation that is 

often stifled by the Federal job training system. In 2007 Michigan launched a new program – 

“No Worker Left Behind” – that streamlines access to training and skill development programs. 

Any unemployed or displaced worker is eligible to receive up to two years of free tuition at any 

community college, university, or approved training program (up to $5,000 per year) to pursue a 

degree or occupational certificate in a high-demand occupation or emerging industry.59

Representatives from Michigan report to CEA that to be able to offer such a generous training 

grant as well as other services to all eligible workers, the Michigan Works! Agencies and 

training providers cobble together funding from diverse programs, such as the different titles 

within WIA, Trade Adjustment Assistance (TAA), Temporary Assistance to Needy Families 

(TANF), Vocational Rehabilitation Client Services, and the Food Assistance Employment and 

Training Program. Each program has its own eligibility and reporting requirements, and 

managing these multiple reporting requirements adds administrative costs and headaches and 

discourages the creation of new, more effective, training models. 

While it is easy to identify the need to simplify, it is a far greater challenge to streamline 

in a way that improves efficiency, maintains accountability, and reduces duplication of services 

but does not undermine the effective targeting of resources to populations in need. Nevertheless, 

this is crucial to the design of a more effective system. 

 Programs and institutions should have an incentive to continually improve and should be 

held accountable for their results. 

Poor completion rates plague most of the programs that provide post-high school 

education and training, but institutions have little incentive to improve. Indeed, because many 

institutions cannot track students after they leave or even keep track of the programs in which the 

students participate, many of them cannot quantify the problem.60 

Without data on where students are going and where they have been, it is difficult to 

align and integrate education and training services. Without information on labor market 

outcomes, it is difficult to tie educational programs closely to employer needs. 

 

 

59 http://www.michigan.gov/documents/nwlb/NWLB_Fact_Sheet_Final_203216_7.pdf 60 Even within the Federal workforce system (through WIA), the One-Stop Career Centers provide only limited 

information on participants receiving training. We have very little knowledge about which institutions they 

attended, the programs in which they participated, and their post-program outcomes. 

 20 
A related problem is a maze of poorly structured, and often inconsistent, accountability 

systems for the various programs that fund post-secondary education and training. A 

consequence of the complexity is that institutions have – at best – little feedback on their 

performance and – at worse – little or no incentive to improve. Most state funding formulas for 

institutions of higher education are entirely based on enrollment rather than on student outcomes. 

This gives institutions an incentive to increase enrollments but does not hold them accountable 

for providing quality programs geared towards maximizing student success.61 

While education and training institutions must be held accountable for their results, it is 

not easy to craft effective accountability systems. Without a very careful design, accountability 

systems that focus on outcomes can have the unintended consequence of encouraging providers 

to “cream skim,” meaning that they try to enroll only those individuals who are the most likely to 

land in good jobs or succeed educationally even without assistance.62 Careful design with 

particular attention to intended – and unintended – consequences is critical to generating the 

types of incentives that will lead to an effective workforce system. 

VIII. CONCLUSION

This report presents analysis suggesting that the U.S. economy will likely emerge from 

the current economic downturn with a job composition that largely resembles the one of today. 

There will be some changes, however. There will be robust growth over the next five to ten 

years in industries such as health care, education, transportation, and construction. There will 

also be strong growth in employment in industries devoted to the production and distribution of 

clean energy. 

In general, the U.S. economy appears to be shifting towards jobs that require workers 

with greater analytical and interactive skills – skills that are typically acquired with some postsecondary education. Many of the fastest growing jobs – including the aircraft equipment 

mechanic and environmental engineering technician jobs we highlighted – will require 

completion of an associate’s degree or certificate program. 

Therefore, we need a comprehensive strategy to ensure that our education and training 

systems are strong and effective. While the current system has been shown to provide valuable 

labor market skills to participants, it could be more effective at encouraging completion and 

responding to the needs of the labor market. 

An effective system would include a solid early childhood, elementary, and secondary 

system that bestows strong basic skills on students; institutions and programs that have goals that 

are aligned and curricula that are cumulative; close collaboration between training providers and 

employers to ensure that curricula are aligned with workforce needs; flexible scheduling, 

 

61 For example, see Midwestern Higher Education Compact (2009). 62 For example, many argue that just such poor design in WIA has discouraged providers from serving low-income 

or low-skilled individuals – the very individuals they were designed to serve (Center for Law and Social Policy 

(2008), Jacobson (2009)). 

 21 
 22 

 

appropriate curricula, and financial aid designed to meet the needs of students; incentives for 

institutions and programs to continually improve and innovate; and accountability for results. 

CEA’s projections, while relying on the most recent data available, are by definition 

based on the jobs of today. Undoubtedly, some of the fastest growing jobs over the next decade 

have yet to be identified in these – or other widely available – data. For example, in 2003, a 

quarter of today’s workforce is in jobs that were not even listed among the Census Bureau’s 

Occupation codes in 1967, and technological change has only accelerated since then.63

Environmental-related occupations – which are expected to experience tremendous growth over 

the next decade – did not exist in comparable data prior to 2000.64 Although we cannot predict 

with certainty what the jobs of the future will be, the evidence strongly suggests that high quality 

education and training is the best way to prepare the workers of today for the jobs of tomorrow. 

63 Krueger (2003). 

64 We observed this in BLS Occupation Projections published in various Monthly Labor Reviews from the past 

decade. 
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