This paper examines the relationship between education economics and adult learning in the United States through the lens of education-for-economy theory. Drawing on human capital theory, it argues that education — particularly adult education — is a critical driver of worker productivity, economic competitiveness, and social equity. The paper surveys the state of adult literacy, the skills gaps facing the U.S. workforce, the underfunding of adult education programs relative to K–12 and higher education, and the growing importance of lifelong learning and continuing education. It also addresses the role of government in supporting adult learners, the challenges facing immigrants and high school dropouts, and the institutional expansion of lifelong learning as both policy and practice in a global economy.
In an economy motivated by improvement and information, in marketplaces engaged in powerful competition and steady regeneration, in a world of incredible opportunities and risks, in a culture facing multifaceted business, political, scientific, technological, health, and environmental challenges, and in diverse workplaces and communities that center on mutual associations and social networking, the intelligence, agility, and skills of the American people are vital to U.S. competitiveness (21st Century Skills, Education & Competitiveness, 2008).
Education economics is the study of economic matters as they relate to education, encompassing the demand for education and the funding and condition of educational systems. The leading model of the demand for education is founded on human capital theory. The central idea is that undertaking education is an investment in the acquisition of skills and knowledge that will increase earnings or offer long-range benefits such as an appreciation of literature. "An increase in human capital can follow technological development as knowledgeable employees are in demand due to the need for their skills, whether it be in understanding the production process or in operating machines" (Checchi, 2006).
Statistics have shown that nations with high enrollment and graduation rates have developed more rapidly than nations without. The United States has been the world leader in educational progress, starting with the high school movement from 1910 to 1950. There also appears to be an association between gender disparities in education and the pace of economic growth. Greater development has been seen in nations that have a more equal distribution of the percentage of women versus men who graduated from high school. When analyzing correlations in the data, education appears to generate financial growth (Kling & Merrifield, 2009).
The output of the U.S. workforce is a primary determinant of the standard of living of the U.S. population. Worker output is typically measured as output per worker or per hour worked, and it is influenced by many factors, including the education and abilities of the workforce. Education and skills are vital because they increase an employee's capacity to perform tasks and to use productive technologies. Additionally, more highly educated workers can adapt more easily to new responsibilities or to changes in existing ones. Education may also train employees to work more effectively in teams by enhancing their ability to communicate with and understand their colleagues.
Much of the recent concern about the productivity of U.S. workers has been provoked by uncertainty about the ability of domestic companies and employees to compete in an increasingly global marketplace. As growth in U.S. production has slowed over the past two decades and other nations have attained output levels comparable to those in the United States, concern about the competitiveness of U.S. companies and employees has grown. Some observers point to the erosion of the country's productivity advantage and attribute it to what they claim is the limited ability of the U.S. educational system to supply students with the skills necessary to succeed in today's labor market. However, factors other than education also affect output and must be taken into consideration when comparing productivity trends across nations (Education and the Economy: An Indicators Report, 1997).
Variation in the quality and quantity of education across nations is only one factor that contributes to differences in worker output; capital investment, technological advancement, foreign trade, and government regulation can also affect productivity. Nevertheless, education remains a significant contributor to production growth and has a major effect on the standard of living. A better understanding of the relationship between employee productivity and the state of education is necessary to comprehend how investment in education contributes to the U.S. economy (Education and the Economy: An Indicators Report, 1997).
It has been argued in the past that the benefits of investment in adult learning were less certain and more long-range than for investment in children's education. Most significantly, it was thought that funds were best allocated outside the adult education sector. Today, however, there appears to be a shift in thinking, and more resources are being directed toward adult learning. This is primarily due to external forces. International competition is creating a need for adults to remain competitive, and growing geographical and occupational mobility is generating a related demand for language courses and skills-upgrading programs for immigrants. At the same time, broad consensus is emerging in many nations that governments have a significant role to play in allocating more resources to provide underprivileged populations with equal access to continuing education (The economics of adult learning: the role of government, 1999).
All of these forces are having a profound impact on the objectives and nature of adult learning. The main objectives of adult learning now include advancing employment and social inclusion. The field is characterized by a shift from supply-driven to demand-driven organizations and markets, and a broader shift from education to learning. There is also a redistribution of responsibilities for adult learning across a range of actors: the state, the education sector, employers, and individual learners. Governments in many nations are taking on a steering role and delegating more direct responsibilities to institutions at the local level in encouraging the effective and efficient use of adult learning resources (The economics of adult learning: the role of government, 1999).
Formal education plays a fundamental role in the development of both individual potential and the economic potential of society. For individuals, formal education is their principal means of preparing for adult life and competing in the job market. For society, the level of knowledge and technical skills in the labor force — expanded through the education system — is a key determinant of the kinds of industries and investments that are viable in the economy. Since the Industrial Revolution, most countries have either provided or heavily subsidized basic education and, in many cases, higher education. One of the reasons for this financial support is that education generates significant spillover effects that benefit society as a whole (Education and the Economy, 1998).
The National Commission on Adult Literacy recently concluded that the current adult education structure is not prepared to meet 21st-century needs and recommended that adult education and literacy systems in the United States be transformed into an adult education and workforce skills framework, with the new mission of achieving postsecondary and workforce readiness. The present approach is simply insufficient to meet this objective. For many years, its primary function has been to provide basic literacy and English language training, along with preparation for the GED and other high school equivalency tests. Providers often lack the infrastructure, time, curriculum, and resources to prepare people for postsecondary education and quality employment (Guide to Adult Education for Work, 2009).
There is an initiative underway that proposes building a core strand within the adult education structure that would introduce an important new focus: helping low-skilled adults attain the English language skills and work-readiness abilities they need to successfully advance to postsecondary education or training and progress into high-quality, family-supporting employment. In 2007–2008, three blue-ribbon study groups concluded that:
Large portions of the workforce lack the basic skills employers need to build a globally competitive economy. For instance, 90 million adults scored at the lowest levels of the federal government's 2005 National Assessment of Adult Literacy, 18 million adults have no high school diploma or equivalent, and approximately half of adult immigrants living in the United States report that they do not speak English well.
Improving the schools alone will not resolve the basic skills problem. The number of adults already in the workforce far exceeds the number of school-aged children, and school reform will not fully impact the workforce for many years. An estimated 65 percent of the American workforce that will exist in 2020 is already beyond the reach of the school system. For the most part, the anticipated workforce of the future is the workforce of the present.
The basic skills problem is becoming more serious due to demographic changes. Immigrants are expected to account for most of the net increase in the workforce in coming years, and most arrive with low levels of education and limited English proficiency. Additionally, the impending retirement of the baby boom generation will create a skilled-worker shortage in many high-growth areas.
Insufficient basic skills are a primary cause of low earnings and stagnant incomes. Americans with low basic skills are far more likely to be trapped in low-wage, dead-end jobs. Jobs requiring more skills tend to pay more, even among those with the same level of educational attainment. Among high school graduates, recent research suggests that jobs requiring the highest level of basic skills pay on average 50 percent more than those demanding the least (Guide to Adult Education for Work, 2009).
An anticipatory focus on adult education in fact saves governments money by reducing societal healthcare, public assistance, and incarceration costs. Adult education also expands the country's available pool of human capital by helping motivated but under-educated people attain productive employment in today's increasingly high-tech and international job market, and at a far lower cost per student compared to either K–12 or higher education. As a result, adult education and career training is potentially one of the most cost-effective tools the country has to restore its economic health in the aftermath of economic downturns (McLendon, Jones & Rosin, n.d.).
Adult education and training programs conventionally receive less than 10 percent of the federal, state, and local funding that goes to K–12, and less than 5 percent of what is spent to support higher education. To illustrate the scale of this disparity: public funding provides a free education for all young people from kindergarten through high school, yet collective federal, state, and local funding for adult literacy serves only 3 million of the more than 90 million U.S. adults who need such training to be viable in the job market. This is unfortunate and shortsighted, as the need for adult education has never been stronger, and a sustained effort to support adult education would be one of the most cost-effective investments the United States could make toward economic recovery. It would put more people back to work in better-paying jobs while helping to make U.S. employees more competitive internationally — all for an investment that would still be much lower per student than what the U.S. and individual states currently spend on K–12 and higher education (McLendon, Jones & Rosin, n.d.).
"Language, credential, and literacy barriers in the workforce"
"Education as economic investment and human capital"
"Institutional growth of lifelong learning programs"
Adult education and lifelong learning are very important to the success of companies today in the new global business world. There is never a time when a person can know too much, and the more a person knows, the more valuable they are to the job market and the further they will advance.
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