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An in-the-ballpark estimate based on hypothetical situations and their potential effects on earnings and tax revenue for the State of Nebraska. Presented.

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Presentation on theme: "An in-the-ballpark estimate based on hypothetical situations and their potential effects on earnings and tax revenue for the State of Nebraska. Presented."— Presentation transcript:

1 An in-the-ballpark estimate based on hypothetical situations and their potential effects on earnings and tax revenue for the State of Nebraska. Presented March 6, 2008

2 Views educational attainment in terms of earnings and tax revenue gained or lost. Nebraska's Coordinating Commission for Postsecondary Education, March

3 Views educational attainment in terms of earnings and tax revenue gained or lost. This is not the only way to look at educational attainment, but it is a reasonable and logical way to look at it. Nebraska's Coordinating Commission for Postsecondary Education, March

4 Views educational attainment in terms of earnings and tax revenue gained or lost. This is not the only way to look at educational attainment, but it is a reasonable and logical way to look at it. We must make some assumptions, which creates some limitations of the study. These are listed at the end of the presentation. Nebraska's Coordinating Commission for Postsecondary Education, March

5 Question 1: What if we moved Nebraskas degree holders salary differentials to the national average? Question 2: What if our educational attainment levels were to rise to that of the best performing state? Question 3: What if our educational attainment levels were to rise to that of the best performing country? Question 4: What if our educational attainment levels were to rise to that of the best performing state or country? Question 5: What if we raised the educational attainment of blacks and Hispanics to that of whites? Nebraska's Coordinating Commission for Postsecondary Education, March

6 First we must adjust income differential figures for cost of living to make figures comparable across states. Nebraska's Coordinating Commission for Postsecondary Education, March

7 First we must adjust income differential figures for cost of living to make figures comparable across states. Amounts indicate how much more money individuals would earn with a postsecondary degree compared to a high school diploma. Nebraska's Coordinating Commission for Postsecondary Education, March

8 First we must adjust income differential figures for cost of living to make figures comparable across states. Amounts indicate how much more money individuals would earn with a postsecondary degree compared to a high school diploma. Top charts adapted from Higher Education and the Future of Nebraska by Dennis Jones, President of the National Center Higher Education Management Systems. Nebraska's Coordinating Commission for Postsecondary Education, March

9 First we must adjust income differential figures for cost of living to make figures comparable across states. Amounts indicate how much more money individuals would earn with a postsecondary degree compared to a high school diploma. Top charts adapted from Higher Education and the Future of Nebraska by Dennis Jones, President of the National Center Higher Education Management Systems. Bottom charts are the same figures adjusted for the cost of living. Nebraska's Coordinating Commission for Postsecondary Education, March

10 10 Difference in Median Income Associate Degree vs. High School Diploma Before cost of living adjustment Question 1:

11 Nebraska's Coordinating Commission for Postsecondary Education, March Difference in Median Income Bachelors Degree vs. High School Diploma Before cost of living adjustment After cost of living adjustment

12 Before the cost-of-living adjustment, Nebraska was ranked 48 th in associate degree salary differentials, and 38 th in bachelors degree salary differentials. Nebraska's Coordinating Commission for Postsecondary Education, March

13 Before the cost-of-living adjustment, Nebraska was ranked 48 th in associate degree salary differentials, and 38 th in bachelors degree salary differentials. After adjusting for the cost of living, Nebraska moved to 45 th in associate degree salary differentials, and 27 th in bachelors degree salary differentials. Nebraska's Coordinating Commission for Postsecondary Education, March

14 In both cases, Nebraska still falls well short of the national average. Nebraska's Coordinating Commission for Postsecondary Education, March

15 In both cases, Nebraska still falls well short of the national average. Even after adjusting for the cost of living, the salary differential is almost as much for an associate degree in Texas ($13,700) as a bachelors degree in Nebraska ($16,900). Nebraska's Coordinating Commission for Postsecondary Education, March

16 Nebraska's Coordinating Commission for Postsecondary Education, March

17 Nebraska's Coordinating Commission for Postsecondary Education, March

18 Nebraska's Coordinating Commission for Postsecondary Education, March

19 Nebraska's Coordinating Commission for Postsecondary Education, March

20 Nebraska's Coordinating Commission for Postsecondary Education, March

21 Before After Nebraska's Coordinating Commission for Postsecondary Education, March Population age 25 to 64 by Race/Ethnicity and Educational Attainment

22 Nebraska's Coordinating Commission for Postsecondary Education, March

23 Nebraska's Coordinating Commission for Postsecondary Education, March

24 Nebraska's Coordinating Commission for Postsecondary Education, March

25 We will assume that… The population age 25 to 64 with an Associate or Bachelors degree is employed in a position that requires a degree and is earning an appropriate salary. All additional degree holders will remain employed within Nebraska, at jobs that utilize their degrees. Educational attainment for 25 to 64 year olds is the same as 25 and over. People age 25 to 64 make up 51% of each racial/ethnic group. Postsecondary institutions are run as efficient businesses and therefore economies of scale apply to education costs. Graduate and first professional degree holders earn the same salary as a bachelors degree. No wage discrimination exists in Nebraska. The mean annual income for all occupations in Nebraska (BLS), $34,300, is representative across the population Nebraska individual income tax rates apply. Someone age 34 will work for at least 30 more years, without raises. Nebraska individual income tax rates remain the same for the next 30 years. Assumptions Nebraska's Coordinating Commission for Postsecondary Education, March

26 Limitations Not a projection of where we could be if things changed now, but rather a hypothetical look at where we could be now if things had changed in the past. Does not take into account a business owners perspective on raising wages. Educational attainment based on a small sector of the population, resulting in a conservative estimate of earnings and tax revenues. Increased education cost for additional degree holders not taken into account. Nebraska's Coordinating Commission for Postsecondary Education, March

27 Nebraska's Coordinating Commission for Postsecondary Education, March 2008 For further information contact: Kermit Spade Data Analyst CCPE - Nebraska (402)


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