Peer Review, Winter 2001
The Demographic Window of Opportunity:
Liberal Education in the New Century
By Anthony P. Carnevale, Vice President for
Public Leadership, and Jeff Strohl, Research Scientist,
both of the Educational Testing Service
"As the conceptual share of the value added in our economic
processes continues to grow, the ability to think abstractly
will be increasingly important across a broad range of professions
... [T]he ability to think abstractly is fostered through
exposure to philosophy, literature, music, art, and languages
... Yet there is more to the liberal arts than increasing
technical intellectual efficiency ... The challenge for our
institutions of higher education is to successfully blend
the exposure to all aspects of human intellectual activity,
especially our artistic propensities and our technical skills."
Alan Greenspan (1999)
During the first decade of the new century, the nation will
experience demographic and economic trends that could launch
a major revival of liberal arts education. The baby-boom echo,
most notably, provides raw material for a tremendous surge
in new students. Generation Y, representing 4.3 million youngsters
born between 1982 and 1997, is now beginning to enter the
traditional 18- to 24-year-old college age and, given current
enrollment rates, is likely to produce an increase of 1.6
million college students, of which 80% will be minorities,
Meanwhile, the liberal educator's broad societal mission
and the employer's more narrow economic interest are converging.
Happily, the new knowledge-based economy needs the kinds of
graduates that liberal education provides -- workers who have
general skills, who can think outside the box, participate
in team efforts, and flourish in interdisciplinary settings.
Of course, there is more to liberal education than dollars
and cents (Gutmann, 1999; Rorty, 1999), and we should hesitate
to justify it on purely economic grounds. Liberal education
also husbands the enduring knowledge that can anchor an American
society undergoing changes at blurring speeds. Moreover, it
leads to the development of a healthy skepticism necessary
to our individualistic culture and our participatory politic.
However, those who cannot get and keep good jobs are unlikely
to become autonomous individuals and good citizens. If liberal
education fails to pay sufficient attention to its role in
preparing students for work, then it cannot achieve its cultural
and political missions. Educators must face up to the economic
realities that shape their work:
- The Knowledge Economy Requires the Skills Learned
through Liberal Education
We already know from the evidence of the past few decades
that people aren't going anywhere in the new knowledge
economy unless they go to college first. In 1959, only
20% of all prime-age jobs required at least some college;
by 1997, the proportion was 56%. The largest share of
current jobs and the fastest job growth today is occurring
in the high-paying, high-skilled services sector¾in areas
such as management, finance, marketing, business services,
and the education and health care professions¾not in the
low-wage services sector or the high-technology sector.
These are the generalists who are best served by a liberal
arts education (Carnevale and Rose, 1998).
One of the greatest strengths of a liberal arts education
is that the environment encourages student-to-student
and student-to-faculty interactions. This learning process
mimics the changing work environment and the increasing
value of general cognitive, problem-solving and interpersonal
skills over specific and technical skills. The high-skilled
managerial, professional, and service jobs that dominate
the new economy entail non-repetitive functions and overlapping
team-based assignments rather than the standardized tasks
of yesteryear. Much the same is true of high-technology
jobs where technology has taken over much of the rote
physical and mental work, leaving technical workers with
non-repetitive deployment functions.1
The new knowledge economy has also spawned a more complex
set of performance standards, requiring broad general
skills. These new standards include quality, variety,
customization, customer focus, speed of innovation, and
the ability to add novelty and entertainment value to
products and services. To meet these new standards, companies
need conscientious workers who are able to take responsibility
for the final product or service, regardless of their
level in the company. Variety and customization require
workers who are creative problem solvers. A focus on customers
requires empathy as well as good communications and interpersonal
skills, and continuous innovation requires an ability
- Despite its Advantages, the Liberal Arts Bachelor's
Degree Does Not Lead to the Best Entry-Level Jobs
The educational value of the liberal arts may be widely
recognized, but the market value of a liberal arts education
is less certain, especially for those who hold bachelor's
degrees. While they can go far in their careers, they
also have trouble getting started. Every CEO can wax poetic
on the value of the liberal arts, but their personnel
departments tend to hire people with more specific business
or vocational preparation. General skills, the kinds fostered
by liberal education, turn out to be rewarded only after
individuals arrive in senior, decision-making positions,
late in their careers. Either the nation's employers need
to think more long-term or those who hold liberal arts
bachelor's degrees need to put a practical point on their
educational pencils before they go into the labor market.
For the most part, earnings depend very little upon
where people attain their liberal arts bachelor's degree
or what courses they take. What matters most is what kind
of job they land after they graduate. Let's look at the
data: On average, males with liberal arts bachelor's degrees
start out and end up earning less than men with business
or technical B.A.s. However, averages are deceiving. Men
with liberal arts bachelor's degrees who become managers
eventually earn more than physical scientists, architects,
and business majors who do not become managers. In similar
fashion, men with bachelor's degrees in English, sociology,
or history who become managers or computer technicians
eventually earn more than business, engineering, accounting,
and scientific B.A.s who do not enter management or computing.
The story is less optimistic for women with liberal
arts degrees, who earn $32,000 per annum, on average.
Because of the continuing segregation of women in teaching
and clerical occupations, women with liberal arts degrees
rarely break into the managerial ranks. Women bachelor's
degree holders who major in fields like engineering, pharmacy,
and computers earn between $10,000 to $15,000 more than
women with liberal arts degrees. Women who break into
the managerial ranks do even better, but they rarely begin
with liberal arts bachelor's degrees (Hecker, 1995).
- When Liberal Education Leads to Graduate or Professional
School, Success Is Guaranteed
The surest route to higher earnings for liberal arts
bachelor's degree holders is to go on to graduate and
professional education. And students who choose liberal
arts majors have a much greater chance of enrolling in
graduate and professional school, winning graduate fellowships,
and eventually completing graduate and professional degrees
(Astin, 1999). In 1959, the median earnings of people
with graduate degrees were less than those of people holding
bachelor's degrees. In 1998, however, people with graduate
education earned $15,000 more than people with bachelor's
For women, graduate education is fast becoming the new
threshold for access to managerial and professional occupation.
In 1973, 73% of all prime-age women with graduate degrees
went into the intellectual and caring professions; 10%
were employed in managerial and professional jobs. By
1998, though, women were shifting out of the intellectual
and caring professions; only 56% of women with graduate
degrees were employed in these occupations. At the same
time, managerial and professional jobs had expanded to
constitute 21% of women with graduate degrees.
- Under-investment in Liberal Education is a Case of
Market Failure to Recognize Latent Value
The incongruity between initial hiring patterns among
B.A.s and the eventual value of liberal education at work
is only one example of a general failure of markets to
encourage investments in liberal education. This under-investment
stems primarily from the fact that (in an individualistic
culture, a participatory polity, and a market-based economy)
the crucial benefits of liberal education are indirect
and long-term (Hartz, 1955; Weiss, 1988; Wiebe, 1995;
Lipset, 1997). Investments that support the culture and
polity bring few short-term or obvious economic returns.
We can describe the economic and cultural value of liberal
education as latent value. It is a seed that needs to
be planted as soon as possible after students have demonstrated
basic competencies, because it leavens all learning and
practical experiences thereafter. Latent value is the
educator's version of "patient capital" or long-term investment.
Its value grows with experience and is the catalyst that
turns rote knowledge into true understanding.
Liberal education is also a crucial anchor for the professions
in a world increasingly driven by the narrow valuation
of cost efficiency and direct earnings returns. The struggle
between the managerial values of the HMOs and the nurturing
values and service standards of the medical professions
can be seen as a test case, presaging larger struggles
to balance managerial with professional values, a contest
in which education plays an important part (Abbott, 1988;
Freidson, 1994; Krause, 1996).
Opportunities and Challenges Ahead
The demographic and economic forces already in place guarantee
a surge in new students competing for seats at liberal arts
colleges. And as graduate and professional education continues
to top the charts in earnings returns, the role of those colleges
as preparatory schools for managerial and professional jobs
will only expand. In short, the liberal arts colleges will
survive, prosper, and grow in the new economy.
However, the future of liberal education, as distinct from
liberal arts colleges, is less clear. The demand for it will
certainly exceed any conceivable expansion in liberal arts
colleges.2 Outside of that context, though, it is not clear
how to expand investments in education's latent value in the
face of growing cost pressures, not to mention the bias that
considers liberal education to be expensive, impractical,
and even irrelevant for the mass of American students.
Moreover, if we are going to provide liberal education in
response to the new wave of incoming students, we need to
do it right this time. The rapid expansion of higher education
in the post-World War II era all too often offered liberal
education as a fragmented set of general education electives,
delivered in theater style where student-to-teacher ratios
often exceeded a hundred to one-with graduate students often
substituting for expected "big name" professors. Because the
large classroom doesn't well replicate the liberal arts environment,
where education quality is maximized with high student-to-student
and teacher-to-teacher contact, this approach provided economies
of scale, but they were false economies (Astin, 1999).
Improving access and quality of liberal education outside
the traditional liberal arts colleges will not be easy. In
the larger four-year institutions, the cost pressures will
encourage the continuation of false economies in the provision
of liberal education. And community colleges are already experiencing
the struggle to balance liberal education and transfer preparation
with vocational degrees, certificates, certifications, and
customized training (Carnevale and Desrochers, 2001). With
the exception of the most robust business-sponsored executive-development
programs and the individual pursuit of avocational interests,
mention of liberal education is a nonstarter in debates about
lifelong learning, workforce training, and adult education.
There is no getting around the fact that the future of liberal
education is largely about money. Even at current postsecondary
participation rates, the coming demographic surge is likely
to cost an additional $19 billion a year by 2015. If governments
don't continue to pay for eighty cents on the dollar in new
costs, tuition will continue to rise faster than the discretionary
incomes of families, and public pressures will encourage even
more false economies in funding liberal education. Students
from low-income families, where minorities are concentrated,
will be bumped down the hierarchy of selectivity and out of
liberal education programs in general, opting for more vocationally
oriented programs in less selective and two- and four-year
colleges. Further, the general shift from need-based to merit-based
aid will exacerbate these effects. And technology won't save
the day, since the primary effect of new technology in service
industries like education is not to reduce costs but to add
value in the form of quality, variety, customization, convenience,
novelty, and speed (Carnevale and Fry, 2001; OTA, 1990; Ehrenberg,
2000; Zuboff, 1988).
New funds for liberal education in postsecondary institutions
will be very hard to find, even more so given the competing
resource demands to establish a universal preschool system,
to meet standards in elementary and secondary education, and
to provide for lifelong learning.
Fully funding the latent cultural and economic value of
liberal education will continue to be a daunting challenge.
The economic and cultural costs of our continuing under-investment
will only increase as the student population surges, as the
new knowledge economy expands, and as the complexity of cultural
diversity intensifies. Access to liberal education has become
the standard for full inclusion in the culture and economy
of the 21st century. However, rising cost pressures threaten
to make liberal education a privilege rather than a prerequisite,
even though that can only impair our economic performance
and put our egalitarian values at risk.
- With so much attention focused on high technology, a
return to the liberal arts might seem anachronistic. But
high-tech is not where the jobs are. The share of high-tech
and scientific jobs has doubled since 1959 but still represents
less than 10% of all jobs. While technology has been the
key ingredient in the recipe for the new economy, high-tech
jobs, high-tech skills and high-tech earnings have not grown
commensurately. The principal beneficiaries of the new technology
have been its low-tech users in managerial, professional,
and business service jobs (Carnevale and Rose, 1998).
- In concept, an idealized mass educational preparation
should be a play in four acts, with liberal education introduced
in the second act. In the first act, roughly consistent
with our current pre-K-12 system, students will be met by
socially prescribed standardized content for all students.
This basic preparation and socialization should be performance-based,
Students should be allowed to move out of the pre-K-16 barracks
once they have met accepted standards. For most students,
this would occur somewhere between their high school sophomore
and senior years. Once students have met basic standards,
they should move into a more customized and student-driven
curriculum that includes liberal studies. Some students
might be best able to get a liberal arts degree in 2+2 programs
that combine the last two years of high school and the first
two years of general education or liberal arts curricula
in college (Katz, 1996).
The third act in the education sequence, somewhere between
the current second year of college and the completion of
graduate or professional degrees, should provide skills
that make students employable. The last act is lifelong
learning, which should combine both liberal and applied
learning to satisfy both vocational and avocational needs.
Abbott, Andrew (1988). The System of Professions: An
Essay on the Division of Expert Labor. Chicago and London:
University of Chicago Press.
Astin, Alexander (1999). "How the Liberal Arts Colleges
Affects Students." Daedalus 128(Winter) 77-100.
Carnevale, Anthony P., and Richard A. Fry (2001). Economics,
Demography, and the Future of Higher Education Policy.
Washington, DC: National Governors Association.
Carnevale, Anthony P., and Donna M. Desrochers (2001). Help
Wanted ... Credentials Required: Community Colleges in the
Knowledge Economy. Princeton, NJ: Educational Testing
Carnevale, Anthony P., and Stephen J. Rose (1998). Education
for What? The New Office Economy. Princeton, NJ: Educational
Ehrenberg, Ronald (2000). Tuition Rising: Why College
Costs so Much. Cambridge, MA: Harvard University Press.
Freidson, Eliot (1994). Professionalism Reborn: Theory,
Prophecy, and Policy. Chicago and London: University of
Gutmann, Amy (1987). Democratic Education. Princeton,
N.J: Princeton University Press.
Greenspan, Alan (1999). Remarks made by Chairman Greenspan
at the 81st Annual Meeting of the American Council on Education,
Washington, DC (February 16).
Hartz, Louis (1955). The Liberal Tradition in America.
Boston: Harcourt Brace.
Hecker, E. Daniel (1995). "Earnings of College Graduates,
1993." Monthly Labor Review 118(12): 3-18.
Katz, Stanley (1996). "Restructuring for the Twenty-First
Century." In Nicholas H. Farnham and Adam Yarmolinsky (Eds).
Rethinking Liberal Education, 1st edition. New York:
Oxford University Press.
Krause, Elliott (1996). Death of the Guilds: Professions,
States and the Advance of Capitalism, 1930 to the Present,
1st edition. New Haven, CT: Yale University Press.
Lipset, Seymour M. (1997). American Exceptionalism: A
Double-Edged Sword. London: W. W. Norton & Company.
Rorty, Richard (1999). Philosophy and Social Hope.
New York: Penguin.
Office of Technology Assessment. U.S. Congress (1990). Making
Things Better: Competing in Manufacturing. OTA-TET-443.
Washington, DC: U.S. Government Printing Office.
Vargish, Thomas (1991). "The Value of Humanities in Executive
Development." Sloan Management Review (Spring): 83-91.
Weiss, Richard (1988). The American Myth of Success:
From Horatio Alger to Norman Vincent Peale. Urbana and
Chicago: University of Illinois Press.
Wiebe, Robert H. (1995). Self-Rule: A Cultural History
of American Democracy. Urbana and Chicago: University
of Chicago Press.
Zuboff, Shoshana (1988). In the Age of the Smart Machine:
The Future of Work and Power. New York: Basic Books.