Importing Talent: An Alternative Route to Higher Attainment Rates

The remarkable growth in Irish higher education attainment rates in the past two decades was fueled more by the growth in well-educated foreign-born workers than its higher education policies and funding.

The Obama administration near its outset in 2009 made increasing college attainment rates the “North star” of its higher education policies. The idea was for the US. to re-assert its former hegemony among industrialized countries in the proportion of its workers holding a college degree.

But while US attainment rates have indeed grown in the intervening decade, they have fallen far short of the bold goals set out by Obama administration, the Lumina Foundation and many others. During the same time, however, attainment rates in many countries have grown faster than ours and more countries have now overtaken the U.S. over the past decade.

This is especially true in Ireland where college attainment rates over the past two decades have gone from below average among OCED countries to among the highest in the world. As a result, the Irish experience may hold lessons for the US and other countries around the world as well as many states in the U.S. The most intriguing aspect of the Irish experience, however, is that the rise in its attainment rates has been mostly a function of importing talent which does not entail a country heavily investing in its higher education system.

The U.S. Experience over the Past Decade

In response to the Obama administration and others, over the past decade there has been a concerted effort nationally and in many states to increase college attainment rates. This effort included increased federal and state funding on higher education, with particular emphasis on policies designed to increase the college completion rate in the U.S. — the share of students who complete their programs of study. Historically U.S. completion rates have been modest compared to those of many other industrialized countries.

The underlying theory was that increasing the degree completion rate would lead to higher attainment rates as well. But while completion rates have increased modestly in the past decade, they remain below those of many other countries. And of perhaps greater significance, the growth in the attainment rates have fallen short of the ambitious goals that were set out in the early years of the Obama administration.

In 2009, the share of American workers aged 25–64 and the youngest group of workers, aged 25–34, with some form of postsecondary degree was 41 percent. At that time, the goal set by the Obama administration was 60 percent by 2020. Other groups like the Lumina foundation set similar goals.

By 2019, however, these percentages have grown to 49 percent and 50 percent respectively, meaning that the attainment rates grew by roughly one-quarter in the decade. This growth is consistent with historical patterns but only halfway to the 60 percent goal.

The story is similar for those U.S. workers holding at least a bachelor’s degree. Between 2009 and 2019, the share of adult workers aged 25–64 with at least a bachelor’s degree in the U.S. grew from 31 percent to 38 percent, an increase of roughly one-quarter. For the youngest group of workers, the growth was similar in terms of those holding at least a bachelor’s degree.

The Irish Experience over Two Decades

Compare the US experience with that of Ireland. Between 2009 and 2019, the attainment rate for all Irish workers aged 25–64 who hold any kind of tertiary degree grew from 36 percent to 60 percent, an increase of two-thirds. For the youngest group of workers, the increase was similarly strong, growing from 48 percent in 2009 to 70 percent in 2019, now tied for highest in the world.

Moreover, the growth in the Irish attainment rate over two decades between 1999 to 2019 was equally impressive. The proportion of Irish workers with any tertiary degree for workers aged 25–64 in Ireland roughly tripled from 1999 to 2019. For the youngest group of workers, the attainment rate more than tripled. In comparison, the share of the youngest group of workers in the U.S. with a postsecondary degree grew by less than one-third.

As a result, Ireland is one of the great success stories around the world when it comes to attainment over the past quarter century. Ireland now has one of the highest college attainment rates in the world. Moreover, when compared to the experience of other industrialized countries, Ireland is one of the few countries in the world that have coupled growth in population with growing attainment rates.

These international comparisons raise the question why Ireland has been so much more successful in raising its attainment rates than most other industrialized countries including the U.S. Many in Ireland point to the fact that Ireland abolished tuition for full time undergraduates in the mid-1990s and argue this policy was a major factor in increasing attainment rates.

But a careful look at the data suggests that the reason for the extraordinary growth in Irish attainment primarily lies outside the higher education system. This can be seen in trends in enrollments, graduates, and funding of the Irish higher education system over the past quarter century since the free tuition fees and related policies were adopted. These various policies, in combination with the underlying demographics in Ireland, have led to the following trends since tuition was abolished for certain groups of students:

• Enrollments in Irish higher education have grown by more than 50 percent since the mid-1990s. This growth was fueled by Ireland having one of the largest youth populations in Europe and an increase in the college going rate from one-third in the 1990s to more than one-half in recent years.
• Growth in the number of graduates has been somewhat faster. In the past twenty years, the number of students receiving a baccalaureate in Ireland grew by two-thirds as Ireland was able to maintain a high completion rate even while increasing its college-going rate, a substantial achievement.
• During the same time, total resources devoted to Irish higher education have not kept pace with the growth in the Irish economy . According to OECD data, higher education spending in Ireland as a share of GDP declined from 1.3 percent in 1995 to 1.0 percent in 2015. This decline was due to real declines in government support while contributions from various fees and private sources did not offset this drop in public support.
• Higher education spending per student in Ireland has been very much tied to economic conditions. In the late 1990s, as the Irish economy was booming, government funding increased more than enough to fully offset the elimination of tuition and so resources per student grew. The economy then stalled around the turn of the century and higher education resources per student fell. This was followed by another burst of resources from government and from fees in the second half of the 2000s. Since 2010, however, total educational resources per student have fallen.

Over the twenty-five year period, total resources per student in Ireland has dropped since free tuition fees were introduced in the 1990s. Increases in revenues from registration fees for all students and tuition fees for other groups of students over that time have not offset the reduction in aggregate government funding. The rapid growth in enrollments has exacerbated this trend as government resources have not kept pace with the growth in the number of students, resulting in declines in resources per student.

Recognizing the boom and bust resources pattern helps to explain why many Irish and others believe that there has been a consistent decline in resources per student. This is particularly relevant to the American audience with respect to free college proposals. The Irish experience confirms that, without tuition acting as a balance wheel, free college plans put tremendous pressure on government to provide adequately for higher education through thick and thin. It also makes it much harder to fund growth adequately as tuition revenues vary with growth but government funding often does not.

So Why has Ireland Been So Successful in Raising Its Attainment Rates?

In normal circumstances, one would expect a country’s attainment rate to grow at roughly the rate of the change in the number of graduates per capita. But in the case of Ireland, undergraduate degrees awarded increased by two-thirds between 1998 to 2018. During that same time, however, the attainment more than tripled, both for workers aged 25–34 and those 25–64 years of age.

By contrast, in the U.S. growing numbers of graduates have not produced commensurate increases in attainments rates. For example, between 1998 and 2018, the number of bachelor’s degrees awarded in the U.S grew by two-thirds, while the attainment rate by roughly one-third during that time.

The much more rapid growth in the Irish attainment rate than in the growth in the number of university students, graduates and resources over time creates a disconnect between Irish trends and those in an international comparison group where attainment rates often have increased at a slower rate than the numbers of graduates. The Irish pattern is also at odds with the prevailing theory that increases in attainment rates require heightened investments in higher education as measured by higher education spending as a share of GDP and/or resources per student.

One possible explanation of this seeming contradiction is the fact that large numbers of relatively well-educated EU residents emigrated to Ireland to fill labor market needs of the Celtic tiger around the turn of the 21st Century. This trend buoyed the numbers of college graduates residing in Ireland and thus have led to marked increases in attainment rates.

A table in OECD’s Education at a Glance 2018 seems to support the above theory. It shows that in 2017 the attainment rate in Ireland of foreign-born workers was substantially higher than the rate of workers who were born in Ireland. To the extent that, in recent decades, the proportion of non-native born college graduates in the Irish labor force has grown, this helps further to explain the very rapid growth in attainment rates in Ireland. Moreover, to the extent that many of these immigrants may have now returned to their home countries, it is possible that Irish attainment rates will fall in the future.

The Irish experience is in contrast to many OECD countries where the attainment rate of native-born workers exceeds that of foreign-born workers. Again, the U.S. serves as a counter example, as the attainment rate of native-born workers in the U.S. is one-third higher than that of foreign-born workers. This suggests that in the U.S. immigrants have been less well-educated than workers born in the U.S. where increases in the worker population have been fed somewhat by increased numbers of less well-educated immigrants.

A bit of good news here is that over time the attainment rates of workers not born in the US has increased substantially. A recent study published by the Pew Research Center indicates that the share of foreign-born workers in the U.S. with at least a bachelor’s degree grew from 5 % in 1960 to 30 % in 2016, a six-fold increase. But even with this growth trend, the attainment rate of foreign-born workers in the U.S. remains below that of native-born workers. This helps to explain why the U.S. attainment rate has grown more slowly over time than the increase in the number of graduates per capita.

Overall, the above analysis suggests that demographics can have a more powerful effect on attainment rates than higher education policies and funding patterns. Countries like Ireland which have a high demand for higher education and which have encouraged the immigration of well-educated workers have managed to increase their attainment rates significantly while investing a smaller share of their economy in higher education.

By contrast, countries like the U.S. which tend to accept higher numbers of foreign-born workers with less education can see their attainment rates grow more slowly than the number of graduates. One conclusion we might draw from this is that effort to raise attainment rates through the investment in higher education may not be enough if not accompanied by enlightened immigration policies that encourage recruitment of well-educated workers.

Implications for States in the U.S.

The analysis above also may have important implications for states seeking to increase their attainment rates. For all states combined, the share of workers with some form of postsecondary degree grew from 20 % in 1990 to 30 % in 2018, an increase of 50 percent. During the same time period, baccalaureate degrees awarded per capita increased by 38%. This suggests overall the population of well-educated workers grew faster than the graduates per 1000 although not nearly as quickly as was the case in Ireland.

The data also indicates there is great variation over time and among the states. For example, in the 1990s, the attainment rate for all states increased increased by 20 % while the number of degrees awarded per capita did not increase at all. By contrast, in the first decade of the 21st century, the attainment rate grew by 16% while graduates per capita increased by 26%. Between 2010 and 2018, the attainment rate and graduates per capita grew at roughly the same rate.

Of perhaps more interest, there is great variation among the states. While the increase across all the states is a function of national migration patterns, the differences among the states are much more likely a function of differences in mobility among the states. Some states typically have net out-migration of well-educated workers — that is, more of the graduates of their colleges and universities eventually become residents of other states than the number of degree holders from other states who become residents. On the other hand, some states consistently import talent —that is more of their workers received their college education in other states than are home grown.

Washington DC has long been the leading example of being a net importer of talent as it has many more well-educated workers as residents than are produced by local universities. As a result, DC residents have the highest attainment rate in the nation — in 2018, the DC attainment rate was 57 percent. It also had the highest attainment rate in 1990: 33 percent. So over that time the attainment rate for D.C. grew by 70 percent while the number of graduates from local institutions grew by only 10 percent.

While most states have had a mixed record over time with regard to mobility of college graduates, in some states attainment rates have consistently grown much faster than the number of graduates per capita. Wisconsin, Nebraska, North Carolina, Montana, and Delaware are examples of states where attainment rates grew much faster than the number of graduates between 1990 to 2018. On the other hand, in some states the number of graduates per capita regularly exceeded the growth of attainment rates between 1990 to 2018, including Utah, West Virginia, Idaho and New Hampshire.

These trends have at least two important implications for state policymakers intent in raising their attainment rates. One is that they ought to be more aware of where their workers received their education and to what extent their large-scale investment in public institutions within the state are paying dividends in producing college-educated workers who remain in state.

Another obvious implication drawn from the Irish experience is that worker migration policies and trends can have a substantial impact on attainment rates. A reasonable conclusion from this is that a successful state attainment strategy should include some combination of investment in the state’s higher education system and economic development policies that encourage the employers of well-educated workers to remain or re-locate in state.

Much of the analysis presented here is drawn from a forthcoming case study of Irish higher education written with Jason Delisle of AEI.