[Economic Report of the President (2006)]
[Administration of George W. Bush]
[Online through the Government Printing Office, www.gpo.gov]

 
CHAPTER 2

Skills for the U.S. Workforce



A strong U.S. economy requires a skilled and well-educated workforce
that is prepared to meet the challenges presented by a rapidly
changing world economy. Research has found, for example, that
countries with higher levels of education and higher average math and
science test scores experience faster economic growth. For more than
a half-century, the United States experienced an extraordinary rise
in education levels and still maintains one of the best-educated
populations in the world. But in recent years, improvements in
educational attainment have slowed. Today, for example, younger
Americans are less educated, on average, than their counterparts in a
number of advanced countries. In addition, U.S. high school students
also score below students in most other advanced countries in their
math and science skills. To remain competitive in the global economy,
the United States needs to improve the education and skills of its
residents and prepare them for jobs that will be available in the
future.
This chapter discusses the importance of the education and skill levels
of the U.S. workforce, the contributions of legal immigrants to the
skills of the U.S. workforce, and the importance of upgrading workforce
skills through job training. The key points of this chapter are:
Education is a key contributor to economic growth and
individual income.
Advances in education levels have slowed over the past 25 years.
This slowdown could jeopardize the U.S. standard of living in years to
come.
Legal immigrants make up a vital part of the U.S. economy,
particularly in the science and engineering sectors.
Workers need to continually upgrade their skills if they are
to adapt to and take part in a continually changing economy.
By setting its sights on improving the education and skills of U.S.
workers, the United States can create a workforce that will thrive in
the fast-changing world economy.
Educational Achievement in the United States
Both economic research and common sense suggest that workers' skills
play a critical role in economic growth and individual well-being. In
the past, rapid increases in schooling levels helped to raise the U.S.
standard of living, but in recent years improvements in educational
attainment have slowed. Unless the United States can improve the
educational achievement of its residents, it may be difficult to
sustain rapid economic growth in the future.
Workforce Skills and the U.S. Standard of Living
Education and Income
Economic research suggests that educational attainment and test scores
are important at both the individual and the national level. At the
individual level, people with higher levels of education have higher
earnings than people with less education. In 2004, workers with a
bachelor's degree only (no advanced degree) earned almost $23,000 more
per year on average than workers with a high school degree only (see
Table 2-1). These differences have grown over time: In 1975, workers
with only a bachelor's degree earned $14,220 more per year (in 2004
dollars) than high-school educated workers. According to a U.S. Census
Bureau study, over his or her lifetime, a worker with only a bachelor's
degree earns nearly $1 million more (in 2004 dollars) than a worker
with a high school degree only.
In addition to income, schooling levels are associated with other
positive economic and social outcomes. More-educated adults are less
likely to be unemployed or incarcerated than less-educated adults.
More-educated adults are healthier and have lower mortality rates than
less-educated adults. They are also more likely to have college-
educated children, thereby passing the benefits of higher levels of
education on to future generations.
Studies have also shown that higher test scores are associated with
higher wages and more years of schooling. High school students with
higher test scores are more likely to attend college and, if they
attend, are more likely to graduate. Controlling for individuals'
educational attainment and family background, those who score higher
on achievement tests in high school have higher wages later in life.



Education and U.S. Standard of Living
Higher schooling levels and test scores do not just improve
individual outcomes, they also raise the standard of living for the
country as a whole. More-skilled workers are typically better at
identifying, adapting, and implementing ideas that lead to higher
productivity growth. Productivity growth raises the standard of living
because it leads to real increases in workers' wages. Research has
found that, all else equal, countries with higher levels of education
and higher average math and science test scores experience faster
economic growth. A recent study of U.S. growth between 1950 and 1993
found that one-third of productivity growth over this period was due
to increased levels of education.
Education and skills are critical for economic growth, but other
factors, such as openness to trade and government institutions that
protect private property, are also important. The United States tends
to score highly in these areas compared with its international peers,
which may help to explain why the United States has experienced faster
economic growth than most other advanced countries over the last
decade.
Educational Attainment
For more than a half-century, education levels have been rising in the
United States. In 2004, about 85 percent of adults aged 25 and older
reported that they had completed high school; 28 percent of adults had
attained a bachelor's degree or higher (see Chart 2-1). This is an
extraordinary rise since the mid-twentieth century, when only about
36 percent of adults had a high school diploma and around 6 percent
had a bachelor's degree or higher.
This rapid rise in educational attainment came about mainly because,
for many years, each generation was more educated than the one before:
Each generation was more likely than the previous one to have
completed high school or attained a bachelor's degree. As older, less-
educated workers retired and younger, more-educated workers entered
the workforce, the overall education level of the U.S. workforce grew
rapidly.
Over the past 25 years, however, this pattern has changed. According
to some measures, younger generations have been no more educated than
previous ones. The share of U.S. residents aged 25-29 who have
completed high school has remained relatively constant over this time,
staying within a range of about 85 percent to 88 percent (see Chart
2-1). Over the same period, the manner in which people complete high
school has changed. People counted as having completed high school
include both those who graduate from high school and those who receive
a General Education Development (GED) certificate or another
alternative to a regular high school diploma. (The GED is a
certificate awarded to applicants who pass a specific, approved, high-
school equivalency exam.) Over time, GED recipients have made up an
increasing share of this group. In 1999, of 18- to 24-year-olds who
had completed high school, about 11 percent obtained a high school
credential via a GED, up from 5 percent in 1988. While GED recipients
are counted as people who have completed high school, studies suggest
that they are not equivalent to high school graduates in their
economic outcomes. For instance, GED recipients have lower earnings
and are less likely to obtain post-secondary education than are high
school graduates. These differences in economic outcomes are of
concern given that GED recipients make up an increasing share of those
who have completed high school.
Unlike the share of people who have completed high school, the share
of people aged 25-29 who have a bachelor's degree or higher has
continued to rise. This share, however, is rising more slowly than it
was 25 years ago. Over the past 25 years, it rose 6 percentage points,
from 23 percent in 1979 to
29 percent in 2004. In contrast, in the 25 years prior to 1979, it
increased by about 13 percentage points, or more than twice as much.
Although schooling levels, already relatively high in the United
States, cannot grow indefinitely, international comparisons of
educational attainment suggest that the United States still has great
potential for increases in the schooling levels of its residents.
These comparisons show that younger U.S. residents have lower levels
of education than their counterparts in a number of other advanced





countries. In 2002, for example, half of young people in Canada and
Japan had attained a college degree (an associate's or bachelor's
degree or higher), compared with 39 percent of young people in the
United States.
Many students exit college without obtaining a bachelor's degree. In
2004, about one-quarter of adults had attended a post-secondary
institution but had not completed a bachelor's degree. People who
complete some college without obtaining a bachelor's degree are a
diverse group. Some attain an academic or vocational associate's
degree or certificate, while others drop out of college without
completing a single semester. Some attend a four-year college, while
others go to two-year community colleges. Among those with some
college but no bachelor's degree, many began college immediately after
completing high school, while others are older workers who return to
school for additional training.

Educational Attainment by Race, Ethnicity, and Gender
Women tend to be more educated than men. Women are more likely to
have completed high school or obtained a bachelor's degree or higher.
In 2004, for example, about 31 percent of 25- to 29-year-old women
had a bachelor's degree or higher, compared with 26 percent of their
male counterparts (see Table 2-2). This is a fairly recent trend:
Until 1991, men in this age group were more likely than women to have
a bachelor's degree or higher.
Educational attainment differs widely by race and ethnicity. More
than 90 percent of non-Hispanic white and Asian 25- to 29-year-olds
have completed high school, compared with 88 percent of blacks and 62
percent of Hispanics in that age group (see Table 2-2). Racial and
ethnic differences are even larger for college completion: Among 25-
to 29-year-olds, about 61 percent of Asians have a bachelor's degree
or higher, compared with 35 percent of non-Hispanic whites, 17
percent of blacks, and 11 percent of Hispanics.


Schooling levels differ between natives and immigrants. In 2004, for
example, half of all adult Asian immigrants had completed a
bachelor's degree or higher, compared with 28 percent of the overall
adult U.S.-born population. Latin American immigrants tend to have
lower levels of schooling while their children tend to improve upon
the education attained by their parents. According to the National
Center for Education Statistics, for example, about 50 percent of
Latin American immigrants aged 18-24 had completed high school, while
the high-school completion rate was 78 percent among their U.S.-born
children of the same age.
Math, Science, and Reading Skills in the United States and Around
the World
Educational attainment is an important measure of the preparedness of
a nation's workforce, but it does not tell the whole story: Two
people with the same level of education may have very different skill
levels. Similarly, a high school diploma may not ensure that a student
is competent in all areas. The fact that growth in schooling has
slowed in the United States might be less worrisome if it were
balanced by an improvement among the U.S. population in other measures
of skills.
One way in which the United States monitors the academic preparedness
and skills of its students is through standardized tests of math,
science, and reading. The United States participates in several
national and international tests for elementary and high school
students. These tests shed light on how the math, science, and reading
skills of U.S. students compare to those of students in other
countries.
Table 2-3 ranks advanced countries by students' scores on math and
science tests at different ages. The countries are ranked by average
score, with the highest scorers at the top. Not all countries
participate in every test. So that the country rankings can be
compared at different ages, only countries that participated in at
least half of the tests are included in the table.
As the table shows, older U.S. students do worse relative to other
advanced countries than younger U.S. students do. At ages 9 and 13,
the United States generally places above the middle of the rankings
on math and science tests. By age 15, however, U.S. students are
outperformed by most of their international peers. Among students in
their last year of secondary school, U.S. students are at or near the
bottom of the rankings. Country rankings from international tests in
reading, not shown in Table 2-3, are only available at ages 9 and 15.
In rankings of advanced countries similar to those shown in Table 2-3
for math and science, U.S. students score above the middle of the
rankings in reading at age 9 but fall below the middle by age 15.



The United States has also conducted tests of its 9-, 13-, and
17-year-olds in math and reading going back to the early 1970s.
These test results show that elementary school student scores have
improved since the early 1970s, especially in math, but the math and
reading scores of 17-year-olds are essentially unchanged. This
discrepancy means that the United States has failed to translate
test-score gains among younger students into higher scores among
older students. There is little consensus as to why test scores have
not improved more among older students, but understanding the
mechanisms would be an important step in raising their educational
achievement.
School Accountability and No Child Left Behind
In recent years, as a result of state initiatives and the No Child
Left Behind Act, states have implemented plans to enhance school
accountability, with the aim of improving student achievement. Under
these ``strict accountability'' plans, schools can be sanctioned (such
as through loss of funding or mandatory restructuring) if their
students do not meet performance standards. In order for school
accountability to work, student achievement must be measured in a
quantifiable way that is comparable across students and schools.
This measurement is normally done through standardized tests, which
are used to quantify school quality in order to identify low-
performing schools. These tests allow parents to make meaningful
comparisons between schools and make informed decisions about the
schools in which to enroll their children.

Rigorous research into the effects of school accountability on
student performance is limited, but the results are promising. For
instance, a 2004 study found that states implementing school
accountability during the 1990s experienced greater increases in
students' test scores afterward than states without accountability.
This study further found that only strict school accountability led
to higher student achievement.
In January 2002, the President signed into law the No Child Left
Behind (NCLB) Act, with the purpose of improving the performance of
U.S. students. NCLB aims to make schools more accountable for the
performance of their students. Under NCLB, each state sets standards
for what students in grades 3-8 should know in math and reading.
(Science assessments will be added by the 2007-2008 school year.)
States must measure students' progress toward those standards through
standardized tests. Schools must meet not only an overall annual
performance goal but also specific performance goals for subgroups of
students, such as racial, ethnic, and income groups. Schools that do
not eventually meet performance goals must allow students to transfer
to another public school, including charter schools, within the
school  district and must offer supplemental educational services to
students attending schools in need of improvement.
NCLB accountability based on test scores mostly applies to grades
3-8. Testing is now required only once in high school. The President
has proposed expanding accountability in high schools by requiring
assessments in reading and math for students in grades 9, 10, and 11.
Expansion of testing in high schools could help our high school
students improve their performance
relative to their counterparts in other nations.
Immigrants in the U.S. Workforce
Legal immigrants are a critical part of the U.S. workforce. Although
both low- and high-skilled immigrants contribute to the U.S. economy,
this chapter focuses on high-skilled immigrants. Chapter 4 of the
2005 Economic Report of the President covered immigration in greater
depth, with a particular focus on illegal immigrants, who tend to be
low-skilled, as well as the fiscal impact of immigration, immigrants
and the U.S. labor market, and immigration policy and the
enforcement of immigration laws.
Immigrants living in the United States can be divided into four
groups: naturalized American citizens, immigrants who have become
citizens by passing a citizenship test and fulfilling other
requirements; permanent residents, immigrants who have ``green cards''
and the legal right to reside permanently in the United States but
have not become naturalized citizens; temporary residents, people
admitted to the United States temporarily for a
specific purpose, including visitors, students, and temporary workers
(referred to as nonimmigrants by immigration authorities); and
illegal immigrants, people residing in the United States illegally.
This chapter uses the terms immigrant and foreign-born according to
the Census Bureau's definition: Any person who is in the United
States who was not a U.S. citizen at birth, that is, was not born in
the United States or of U.S. parents.
Immigrants are prevalent in every education group but are
particularly represented among the least-educated workers (those with
less than a high school degree) and among the most-educated workers
(those with a doctoral or professional degree). As U.S. workers have
become more educated and increasingly work in jobs requiring higher
education levels, many low-skilled jobs continue to be filled by
immigrants. At the same time, high-skilled immigrant workers are a
significant part of the skilled U.S. workforce, especially in the
science and engineering fields. Many of the nation's university and
private research laboratories rely heavily on immigrant graduate
students, post-doctoral students, and researchers.
Immigrants in Science and Engineering
Innovation is crucial to U.S. economic growth and competitiveness,
and the United States is a leading innovator. Innovation depends, in
part, on scientific research, which in turn requires smart, creative
people proficient in science and technology. One way in which the
United States is able to maintain its position as a leader in
innovation is by attracting the best and the brightest from around
the world. Policies that welcome the world's ``best and brightest''
can contribute to future U.S. competitiveness. More than one-fifth
of America's scientists and engineers come from abroad.
Chart 2-2 shows the share of immigrants among scientists and
engineers aged 25-44 by education in 1996 and 2002. Immigrants tend
to come to the United States as young adults, not as older workers.
As the younger, more-recent immigrants age, they should make up a
larger share of older workers as well. Thus, restricting Chart 2-2 to
workers aged 25-44 provides a glimpse at the future of the U.S.
scientific workforce.
Immigrants make up an increasing share of the scientific workforce
(see Chart 2-2). In 2002, immigrants made up about 24 percent of
scientists and engineers aged 25-44, an increase from 17 percent in
1996. The higher the education level, the larger the share of
immigrants: Among scientists and engineers with only a bachelor's
degree, 17 percent were immigrants (up from 11 percent in 1996),
while among those with doctoral or professional degrees, 43 percent
were foreign-born (up from 38 percent in 1996). Immigrants are
especially prevalent in the fields of engineering and math/computer
science and in the physical/biological sciences. Among those aged
25-44 with professional or doctoral degrees and working in these
fields, immigrants made up about half of workers.



International Science and Engineering Students
The United States is a top destination for science and engineering
students from around the world. In 2003, almost 150,000 students
from abroad were enrolled in science and engineering graduate
programs at U.S. universities. Nonetheless, new enrollment of such
students has been falling. Between 2001 and 2003 (the latest year
available), first-time international graduate student enrollment in
U.S. science and engineering programs declined by 13 percent. This
decline may be the result of increased training opportunities in
other countries and visa restrictions for foreign students and
scholars put in place in the United States following the
September 11, 2001, terrorist attacks.
After completing their studies in the United States, some students
return to their countries of origin and others join the U.S.
workforce. According to the National Science Foundation, about
three-quarters of non-U.S. citizens who obtain science and
engineering doctorates from U.S. universities plan to stay in the
United States, at least for the short term. In order to remain and
work in the United States, these students must get temporary work
visas or become permanent residents. This process is described in
more detail in the section below.
Regulation of Legal Immigration
The H-1B Program
Temporary work visas allow foreigners to work in the United States
for a limited period of time. A commonly used temporary work visa
for high-skilled foreigners is the H-1B visa. The visa lasts for
three years and is renewable once, for a total stay of up to six
years. U.S. employers hiring H-1B workers must attest that they
will pay the H-1B workers at least as much as similarly employed
U.S. workers and that the working conditions of such workers will
not be harmed. In order to hire an H-1B worker, U.S. employers must
also pay government fees of $1,435 to $2,185, depending on the size
of the firm, plus an additional $1,000 fee for faster processing of
the H-1B application. These costs help to ensure that employers are
unlikely to hire H-1B workers unless suitable U.S. workers are not
available.
Almost all workers with H-1B visas have at least a bachelor's degree,
and half have an advanced degree. H-1B visas have been particularly
important to the high-tech sector, with over half going to scientists,
engineers, and people in computer-related occupations. According to
one study of H-1B workers, many such workers do not come to work from
abroad but are hired as they graduate from U.S. universities.
The number of high-skilled temporary workers is constrained by the
caps on the H-1B program. The number of H-1B visas is capped at
65,000 annually for private companies seeking to hire high-skilled
foreign workers, after having been temporarily raised to 195,000
during 2001-2003. Since May 2005, an additional 20,000 visas have
been available each year for foreigners who have a U.S.-earned
master's degree or higher. H-1B workers are not subject to the cap if
they are employed at institutions of higher education, or at
nonprofit or governmental research organizations.
Since reverting to 65,000, the H-1B cap has been reached earlier and
earlier with each fiscal year. The cap for fiscal year 2004 was
reached less than five months into the fiscal year. The cap for
fiscal year 2005 was filled on the first day of the fiscal year, and
in fiscal year 2006, the cap was reached almost two months before
the year even started. That the H-1B cap has been reached so quickly
suggests that it is no longer sufficient to meet U.S. demand for
high-skilled workers.
Some have proposed to increase the number of high-skilled workers by
replacing the current H-1B cap with a market-based cap. A market-
based cap would increase or decrease with demand for H-1B workers.
If the cap were reached in one year, the cap would be increased by a
set percentage-say, 20 percent-the following year. If the cap were
not reached in a given year, it would fall by a similar amount the
next year. In this way, the number of H-1B workers would depend on
demand for such workers. Any such change would require congressional
action.
Employment-Based Green Cards
A temporary visa allows a foreigner to remain in the United States
for a specified period of time. To stay permanently requires
becoming a permanent resident. In determining who can become a
permanent resident, U.S. immigration law prioritizes family- and
employment-based immigration. Under family-based immigration, new
permanent residents must be sponsored by family members who are
themselves U.S. citizens or permanent residents. Under employment-
based immigration, most workers must be sponsored by their employer
and have at least a bachelor's degree. From 2000-2004, about two-
thirds of new permanent residents received their green cards through
family-based immigration, about 15% through employment-based
immigration, and the remainder through various other programs such
as those for refugees.
Caps on employment-based green cards limit the number of high-skilled
foreigners who can become permanent residents. The cap is set at
140,000 visas per year, including visas for the workers' spouses and
children. Each country's nationals can make up no more than 7 percent
of total immigrant visas. These caps have led to long delays for
applicants, especially for workers from over-represented countries.
For instance, some workers who became eligible in January 2006 for
EB-2 employment-based green cards (for workers with advanced degrees
or persons of exceptional ability) had applied for permanent
residence five years earlier.
A variety of proposals have been advanced for permanent employment-
based immigration to allow for more high-skilled workers and to
reduce wait times. Any changes to the cap on the number of
employment-based green cards would require legislative action. First,
workers' spouses and children could be exempted from the cap, as is
currently done for the H-1B program. Spouses and children make up
about half of the recipients of employment-based green cards, so this
change would roughly double the number of workers able to get
employment-based green cards. Second, the fixed 140,000 cap could be
replaced with a flexible market-based cap that would increase or
decrease with demand for workers eligible for employment-based green
cards. Finally, under current policy, nationals of no single country
can receive more than 7 percent of green cards. This share could be
raised to reduce the long delays for employment-based green cards
for applicants from countries with large numbers of desirable, high-
skilled workers. Careful enforcement of limits on foreign nationals'
access to sensitive technology would provide continued protection
for our national security.
Skilled Immigration and Innovation
Legal skilled immigrants play an important role in the U.S. economy.
They add to the process of scientific discovery, technology
development, and innovation, which in turn lead to greater
productivity growth. Greater productivity growth improves the
standard of living for the U.S. population as a whole.
A recent World Bank study attempted to quantify immigrants'
contributions to innovation and the generation of new ideas, as
measured by the number of patents applied for or received in a given
year. (Patents are a commonly used proxy in studies of innovation.)
According to the study, a 10 percent increase in the number of
graduate students from abroad, as a share of total graduate students,
increases the number of patents granted to U.S.-based universities,
firms, and other institutions by about 6-7 percent. Skilled
immigrants overall have a smaller but still positive effect: a 10
percent increase in the number of skilled immigrants, as a share of
the U.S. labor force, raises the number of patents granted to U.S.-
based institutions by about 1 percent. The results of this study may
be partly due to a higher concentration of foreign graduate students
in the science and engineering fields, as compared to domestic
graduate students who are found in a wide variety of fields
including humanities and liberal arts.
Skilled immigrants not only contribute to the innovation process
themselves, they also help train our own future innovators. The
foreign-born make up about one-fifth of science and engineering
faculty at U.S. universities, including more than one-third of
engineering faculty. As faculty, they teach both undergraduate and
graduate students, training the next generation of U.S. scientists
and engineers.
U.S. immigration law, by restricting the number of high-skilled
immigrants authorized to work and settle in the United States, limits
how many foreigners can contribute to the innovation process.
Increasing the caps on the H-1B program and on the number of
employment-based green cards would allow more high-skilled immigrants
into this country. By welcoming more of the best and the brightest
from around the world, these changes to the caps would enhance U.S.
competitiveness and result in productivity gains for both immigrants
and natives, raising the standard of living for the population as a
whole.
Job Training
Education and learning do not stop when someone leaves school.
Workers need to continually upgrade their skills if they are to adapt
to and take part in a continually changing economy. Skills originally
learned as a teenager or young adult in high school or college can
quickly become outdated. To remain competitive, workers need to keep
their skills relevant, and job training can be a useful way of doing
that.
Job training comes in many forms. Often it occurs on the job, either
through formal programs run by the employer or through informal
learning. Some employers may also send their workers to post-secondary
institutions to receive training. Other workers will attend such
institutions on their own to keep their skills fresh for their current
job, to improve their skills in order to land a better job, or to
upgrade their skills after being laid off.
The Role of Community Colleges
Workers often obtain training at community colleges, generally
two-year post-secondary institutions that offer certificates and
associate's degrees. Community colleges play an important role in
providing training to workers, both directly and through employers.
Of individuals age 30 and older attending college, about half go to
a community college, compared with one-third of students of
traditional college age. Some employers may reimburse workers for
regular courses taken at community colleges, while other employers
may contract with community colleges to offer courses tailored to
the employers' needs. Workers may also attend community colleges on
their own, especially after a job loss. According to one recent
study, about 15-20 percent of long-tenured, laid-off workers complete
at least one community college course around the time of their job
loss.
Given that so much job training and retraining occur at community
colleges, it is important to know whether or not community colleges
actually help workers raise their earnings. Recent studies have found
that community colleges do contribute to workers' earnings. A year
of community college raises real annual earnings by around 6 percent.
Community college also helps laid-off workers. According to one
study, in the long term, a year of community college raises the
earnings of long-tenured, laid-off workers by about 7 percent for men
and even more for women, compared to similar workers who do not
enroll in community college classes. The earnings gains are higher
for workers who take technical, scientific, or health-related
courses, and lower for workers who take less quantitative courses.
One of the major sources of financing for community college students
is the Pell Grant program, a Federal government program that helps
low-income students attend college. In 2005, the Federal government
spent about $7 billion on Pell Grants for students in community
colleges. In addition, in 2005, in order to help community colleges
provide worker training, the President proposed and Congress approved
the creation of Community-based Job Training Grants. The program has
continued in 2006 with $124 million in funding.
Job Training Funding
In 2005, the Federal government spent nearly $15 billion (excluding
Pell Grants) on job training and employment programs. These programs
assist many workers in getting the training and other services they
need to advance their careers. However, these programs can be
strengthened. The $15 billion in job training money is spread among 9
different government agencies and more than 40 different programs,
most with their own rules, eligibility requirements, administrative
staff, and overhead costs. Much of this money is not used to support
job training programs but instead funds job referral
services or job search assistance.
To get more job training dollars into the hands of workers, eliminate
unnecessary duplication of services, and improve accountability, the
President has proposed consolidating several large job training and
employment programs into a single grant that would be used to provide
job training vouchers. These vouchers, known as Career Advancement
Accounts, would be administered by each state but controlled largely
by the worker, who could use the account to pay for education and
training. The education and training could take place either at post-
secondary institutions or through apprenticeships or other work-based
training. These accounts would complement, but not duplicate, Pell
Grant resources available to help workers further their career
education. States would be required to achieve Federal accountability
standards for job placement, employment retention, and earnings. By
reducing administrative costs and redirecting more money into job
training programs, the Career Advancement Accounts proposal would
increase the number of workers who receive the job training they need
to upgrade their skills and improve their employment prospects.
Career Advancement Accounts would also allow workers the flexibility
to choose the training that best suits their needs. They would not
tie workers to any particular training provider or location, thus
providing workers with maximum flexibility.
Conclusion
Historically, high levels of education and skills in the United
States have boosted earnings for individual workers and fueled one of
the most dynamic, innovative economies in the world. In recent years,
though, educational attainment among young people has, by some
measures, leveled off. The rapid growth in schooling in the 1950s and
1960s, and the higher levels of education attained by the younger
residents in some of our international competitors, prove that the
United States can do better. Promoting a flexible and skilled labor
force-through improved access to high-quality primary, secondary,
and post-secondary education, through policies that attract the
world's best and brightest to our shores, and through investment in
the continuing education and training of our workforce-will ensure
that the United States remains a competitive leader in this rapidly
changing world economy.