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Ethnic Gaps On Campus

Economic Trends

Ethnic Gaps on Campus

Will they hamper future growth?

Amajor factor in the nation's amazing job performance in recent decades has been the rising educational achievement of working Americans. From 1980 to 1997, the economy added 34 million jobs filled by workers with at least some college, even as it shed 7 million jobs filled by high school dropouts. Meanwhile, the share of 25-to-29-year-olds with high school diplomas has jumped from 75% in 1970, to 88% today, with two-thirds of high school grads now college-bound.

All of this should bode well for America's economic performance in the new century. The problem, claim Georges Vernez, Richard A. Krop, and the late C. Peter Rydell in a recent RAND Corp. study, is that trends related to the shifting ethnic makeup of the nation's population seem far less favorable. Specifically, the lagging post-secondary-school attainments of two growing minorities--Hispanics and blacks--suggest that the share of Americans with college training entering the labor market could actually start to decline within two decades.

By 2015, the study projects that Hispanics and blacks will account for one-third of the school-age population (and of new entrants to the workforce), up from one-fourth in 1990, while non-Hispanic whites will fall to 58% of the total, and the small but fast-rising Asian group will climb to 6.2%. The biggest increase will be among Hispanics, the majority of whom are of Mexican origin, a group with a particularly poor record of educational attainment.

While Hispanics and blacks have made big strides in high school graduation levels in recent decades, the researchers note that they've made little progress in closing the gaps between their college graduation levels and those of non-Hispanic whites. If this pattern continues, they warn, these gaps will widen and by 2015 the share of adults entering the labor force with college degrees will be lower than in 1990.

In California, with its soaring Mexican population, disparities will be especially sharp. By 2015, Hispanics and blacks will account for 40% of the state's population and 75% of its high school dropouts, while whites and Asians will account for 90% of college grads.

What can be done to remedy this situation? The researchers estimate that added resources--mainly by colleges--to bring minority achievement up to white levels would cost the nation about $23 billion a year. But they also find that such costs would be recouped within a decade or so via lower outlays for income transfer and social programs utilized by poorly educated minorities.

Increasing educational capacity, of course, is only part of the answer. "Greater resources would help a lot," says Vernez, "but we must still find ways to improve minority educational preparation and demand for college."By Gene KoretzReturn to top

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The Real NAFTA Winner

Canada leads the investment race

Although U.S. capital was expected to pour into Mexico in the wake of the 1994 North American Free Trade Agreement, it hasn't quite worked out that way, notes economist Joseph P. Quinlan of Morgan Stanley Dean Witter. To be sure, U.S. foreign direct investment in Mexico has risen from $11 billion in the decade prior to NAFTA's inception to $18.1 billion from 1994 through 1998. But Canada has garnered $39.6 billion in the same period.

While much of the Canadian figure reflects reinvested earnings

accruing from America's big historical investment position in Canada, Quinlan points out that U.S. equity flows to Canada have also exceeded those to Mexico by 50% in the past five years. And a big reason, he says, is that NAFTA has fostered a more relaxed attitude in Canada toward foreign direct investment in formerly protected sectors of its economy such as natural resources, telecommunications, and financial services.Return to top

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