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AI and Economic Mobility

Keeping up with the latest research and debates on AI and the skills-based movement.

Educators and lawmakers are hungry for practical guidance on the impacts of AI on education and work as new research and expertise come online. Also, a backlash emerges to the campaign to drop degree requirements in hiring, with both sides claiming the ‘both/and’ ground.

As organizations scramble to prepare for AI’s impact on education and the workforce, much of the discourse has been concentrated around the extremes of small-stakes hand wringing and apocalyptic visions.

Many people tell me they’re hungry for analysis and guidance on AI that fall between those two poles. Some experts have been on it. George Siemens, a researcher and author, publishes an excellent newsletter. But practical expertise is rare enough that even I get asked to weigh in.

That may be changing. A rapidly expanding body of research explores how the adoption of generative AI may impact equity and economic mobility and help or hinder connections between education and work.

For example, the latest Future of Jobs Report from the World Economic Forum found that three-quarters of companies said they are likely to adopt new AI technologies in the next five years. Almost half expected AI to create more jobs than it eliminates.

Educators, consulting firms, think tanks, and companies also are adding new data and thinking to the discussion. Here are a few contributions from the last week:

  • In an essay for the Brookings Institution, Katya Klinova and Anton Korinek call for the urgent development of tools to effectively evaluate and shape AI’s job impacts. “Leading economists have warned about AI potentially exacerbating the hollowing out of the middle class by reducing the availability of stable, well-paying jobs that don’t require advanced degrees, and accelerating task automation while lagging in creating new tasks for human workers.”

  • The skills required for many jobs have changed by a “staggering” 25% since 2015, with that number expected to reach at least 65% by 2030 due to the rapid development of new technologies like AI, LinkedIn found in a report on the future of work, which was based on insights from 950M professionals worldwide.

  • Leaders from Microsoft and Lightcast in webcast discussed the impact of AI and preparing for jobs that don’t yet exist. They described how AI is affecting industries like banking and finance, as well as the tech sector, and talked about the ethical and social implications of AI and what it means for higher education.

We’ve created a roundup at Work Shift of research on AI and education+work. While not attempting to be comprehensive, we’ll regularly update this living document. So please let us know what you’re interested in and make suggestions of research we should add.

New Player: Jobs for the Future recently launched its Center for AI and the Future of Work, which is incubated at the nonprofit group’s JFFLabs. The center says it seeks to convene a broad range of voices to shape the national dialogue and to help ensure that an AI-powered future accelerates equitable access to quality jobs.

Three big questions have emerged so far, writes Alex Swartsel, who leads the center, in a new essay for Work Shift:

  • How will AI reshape jobs, and how can we prepare all workers and learners with the skills they’ll need?

  • How can education and workforce leaders equitably adopt AI platforms to accelerate their impact?

  • How might we catalyze sustainable policy, practice, and investments in solutions that drive economic opportunity?

“As AI reshapes both the economy and society, we must collectively call for better data, increased accountability, and more flexible support for workers,” Swartsel writes.

Degrees and ‘Populist Virtue Signaling’

A backlash may be emerging to recent moves by states and companies to drop job requirements for four-year college degrees and to move toward skills-based hiring.

“A look at the data suggests the skills-based hiring movement may actually amount to little more than populist virtue signaling,” Ben Wildavsky, an author and visiting scholar at the University of Virginia, wrote this week in an essay published by The New York Times.

That argument expands on a piece Wildavsky wrote last year for Work Shift, where he dumped cold water on chatter about Big Tech and other companies abandoning traditional credentials.

In addition to doing little to expand economic opportunity, Wildavsky wrote this week, the campaign “sends a degree-skeptical message that risks hurting rather than helping those who most would benefit … from pursuing an education beyond high school.” (Princeton University Press will publish Wildavsky’s forthcoming book, The Career Arts: Making the Most of College, Credentials, and Connections.)

I haven’t seen any responses to the op-ed. But here are some of the key facts that underpin this debate:

Who Benefits: The bachelor’s degree clearly pays off for the typical graduate—with an average earnings premium of $30K that more than offsets the costs of a degree—though the average hides a lot of variance. A quarter of bachelor’s degree holders earn no more than the typical high school graduate, and those unlucky graduates are much more likely to have grown up poor.

The question of whom a bachelor’s pays off for, at which colleges, and in what programs is so complex that it’s a large and growing field of research. No simple answers there.

Who Loses Out: Most Americans don’t hold four-year degrees.

  • Roughly 38% of adults hold a bachelor’s or higher, and those percentages drop to 28% for Black adults and 21% for Latinos.

  • The typical four-year degree holder was raised in the middle class or higher. Only 15% of young adults who were raised in low-income families have earned a bachelor’s degree by age 25, compared to 59% of those from top-earning families.

  • The gap is the result of the compounding effect of both lower college-going and lower completion rates. More than 40M adults started college but never earned a credential.

Ditching the Bachelor’s: There’s a risk that the skills-based hiring movement could encourage more people to forgo a four-year degree under the mistaken belief that it’s no longer important in the labor market. But evidence that’s happening is scant.

Instead, a key driver of skepticism about four-year degrees is the national uproar about rising student debt and the cost of college. For example, a recent survey by Public Agenda found that the vast majority of Americans still think a college education gives you a leg up in your career. But they also think colleges are cost prohibitive for low-income students. And there’s a growing sense that the U.S. economic system is rigged—including college.

Many lower-income students opt for community college or other shorter-term options because of perceived costs, but also time and proximity.

Research from Johns Hopkins University, for example, has shown that youths in high-poverty communities understand the value of a bachelor’s in today’s labor market—if anything, they overestimate it—but they opt for shorter-term programs because they don’t believe they'll be able to stay in school for four years.

And statistically, they’re right. The road to a degree is much harder for poor students for a host of nonacademic reasons.

Which Version of Both/And? An advertising campaign from Opportunity@Work and the Ad Council advocates for dropping four-year degree requirements in hiring. It’s aimed at HR managers and seeks to remove an “invisible barrier” for 70M Americans without bachelor’s degrees who have gained skills elsewhere, including those who graduated from community college.

Wildavsky worries about people “giving up on degrees altogether,” and praises a “both/and” approach to getting ahead that involves layering microcredentials and other skills development on top of degrees. Opportunity@Work makes a different “both/and” argument that also sees the bachelor’s as important.

“If we want to rebuild economic mobility, we must see both college and ‘alternative routes’ as viable ways to build a thriving labor force and a path to the middle class,” Kate Naranjo, a then director at the group, wrote last year for Work Shift.

Two things can be true at the same time, as Bryce McKibben, senior director of policy and advocacy for the Hope Center for College, Community, and Justice, wrote this week on the social media platform formerly known as Twitter. More jobs should be open to workers without degrees, he says, because not everyone can get one. And higher ed can be life changing, so we can’t give up on making it affordable and accessible.

I’ve seen few, if any, serious proposals to quit trying to improve college access and completion. However, I have heard from K-12 educators and policymakers that a reboot of four-year college for all isn’t the answer to closing America’s yawning wealth and income gaps.

The Kicker: “We already know college alone cannot fix declining economic mobility because it does not pay off equally for all workers,” Naranjo wrote.

(Elyse Ashburn contributed reporting for this article.)

Open Tabs

Enrollment Crisis
Wake Technical Community College is among several two-year institutions that are seeing enrollment bumps in preliminary fall data, report Jessica Blake and Sara Weissman for Inside Higher Ed. The 10% increase at North Carolina’s Wake Tech follows a similar gain last year by the state’s Blue Ridge Community College. Others across the sector are predicting upticks, including Sonya Christian, chancellor of California’s community colleges.

Student Preparation
Four-year colleges respond robustly to changes in skill demand in the U.S. labor market, researchers found in a working paper published by the National Bureau of Economic Research. This core finding counters the critique that the sector does not adequately prepare students for work, the paper concludes. “Policy efforts that aim to align educational investments with labor demand may struggle to achieve such goals if they target only one side of the market.”

AI and Coding
Southern New Hampshire University will shut down its Kenzie Academy bootcamps, and is citing the impact of AI as a reason, reports Lauren Coffey for Inside Higher Ed. Some coding jobs may be replaced by AI, as the technology boosts productivity in software development. SNHU acquired Kenzie two years ago. The bootcamp program, which currently enrolls 1K students, will no longer accept new cohorts.

Hidden Curriculum
Colleges address the development of career-ready skills through a hidden curriculum that isn’t always apparent to students, including taking classes outside of majors and completing extracurricular projects, Oscar Ybarra, a professor of business administration at the University of Illinois at Urbana-Champaign, writes on LinkedIn. “We must no longer frame traditional college education as antagonistic to the acquisition of skills, or vice versa.”

Income-Share Agreements
Information learners need to make informed decisions about income-share agreements is often missing from publicly available documentation, according to a research report from the RAND Corporation. The report lays out the market structure, communication, and equity implications for ISAs as a student loan alternative. It includes potential ISA downsides and benefits for learners, as well as recommendations for policymakers.

Short-Term Pell
The JOBS Act, a bipartisan bill in the U.S. Congress that would open up federal Pell Grants to short-term programs, was effectively shelved after a late-July Senate committee markup was canceled, according to the National Skills Coalition. The nonprofit group describes several other short-term Pell proposals in Congress, some introduced by committee leadership, which “provide a snapshot into sticking points that Congress still needs to iron out.”

Credentials of Value
The Texas Higher Education Coordinating Board adopted rules to implement the state’s community college funding formula, which ties $700M in new support to results. The reforms seek to incentivize dual-credit programs while defining credentials of value and high-demand fields, writes Renzo Soto, policy adviser at Texas 2036, who also weighed in on the minimum value threshold for credentials under the formula.

Job Moves
Shalin Jyotishi has moved back to a full-time role at New America as a senior advisor, where he will be focused on building out a program on the future of education and work. Jyotishi had been a part-time fellow at the think tank while working as a senior program manager at the Burning Glass Institute.

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