Effects of Education Level on Economic Outcomes during COVID-19: National and Local Perspectives

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Education matters: Degree holders are less likely to be negatively impacted by COVID-19

The COVID-19 pandemic has caused broad socioeconomic disruptions over the past two years. For many households, the virus has meant loss of work, difficulties with expenses, and uncertainty over their next meal or rent payment. These economic hardships have disproportionately affected people with lower educational attainment, many of whom continue to face barriers accessing postsecondary education.1

Using data from the U.S. Census Bureau’s Household Pulse Survey, the Research Institute at Dallas College observes that higher education has served to partially protect workers against the pandemic’s deleterious economic effects. Respondents with a bachelor’s degree or higher have been most resilient to the virus’s adverse impacts on employment, followed by those with an associate degree; a high school diploma alone has offered minimal refuge. These national trends are similar to those in Texas and in Dallas, although higher variance due to smaller sample sizes clouds the state and local pictures. These findings build on and are consistent with prior work by the Community College Research Center at Teachers College, Columbia University.2

Survey Says

The Household Pulse Survey is a recurring questionnaire designed to measure the social and economic effects of the coronavirus pandemic on American households.3 First released by the United States Census Bureau in April 2020, the survey has been administered on an ongoing basis every few weeks since, with later phases adding extra questions. Questions include whether respondents have worked for pay in the last week, how difficult it is to cover household expenses, whether they have enough food to eat, and how confident they are in making their next rent or mortgage payment, among others. Respondents also identify their educational attainment, age, gender, race, ethnicity, and annual household income.

The Research Institute analyzed forty survey collection windows that range in time from April 2020 to December 2021. Random addresses across the United States were surveyed in each window to collect a representative sample. On average, around 80,000 responses were collected per window; 4,000 of those were in Texas, 1,600 of which were in the Dallas-Fort Worth-Arlington metropolitan statistical area. This analysis further restricts the data set to only respondents aged 25-64 to reflect prime-age workers who have largely completed their education. To address small sample sizes for Texas and Dallas, the analysis aggregates unit microdata at monthly and quarterly frequencies, using the Census Bureau’s person-level weights to scale data in relation to the population.4

 

Figure 1 illustrates how employment rates varied with educational attainment at the national level from April 2020 to December 2021. In April 2020, 73% of respondents with a bachelor’s degree had worked in the last week, compared to 60% of those with an associate degree, 58% of those with some college, and 50% of those with a high school diploma.5 The gaps between attainment levels persisted during the pandemic, even as rates improved over time for every group. In December 2021, employment rates were 78% with a bachelor’s degree, 69% with an associate degree, 66% with some college, and 56% with a high school diploma.

Figure 1
Percent Who Worked for Pay or Profit in the Last Seven Days (United States)

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Note: Values shown are person-weighted percentages calculated from individual responses, aggregated by month based on survey window dates.

Sources: Household Pulse Survey, United States Census Bureau; author's calculations.

 

Figure 2 shows average employment rates by educational attainment for the data set, including rates for some levels of educational attainment not shown in Figure 1. We see a stairstep curve with higher attainment corresponding to higher employment rates. Respondents with associate degrees had rates 10 percentage points above those with a high school diploma, and those with bachelor’s degrees had rates an additional 9 percentage points above those with associate degrees. These gaps are similar at the state and local levels, with Texas and Dallas following the same stairstep pattern.

Figure 2
Average Employment Rate by Level of Educational Attainment, April 2020-December 2021 (United States)

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Note: Values shown are unweighted percentages calculated by aggregating all individual responses from April 2020 to December 2021.

Sources: Household Pulse Survey, United States Census Bureau; author's calculations.

 

Survey participants who had not worked over the last week were asked to identify the main reason for not doing so. Some responses indicated that COVID-19 had caused layoffs, furloughs, and workplace closures. Figure 3 shows that this type of COVID-induced unemployment has declined for all groups since the early months of the pandemic, when those with lower attainment suffered the most job losses. At their peak, payroll cuts caused by COVID-19 accounted for the unemployment for approximately 1 in 4 high school graduates, 1 in 5 associate degree holders, and 1 in 7 bachelor’s degree holders who were unemployed. This suggests that skilled workers with degrees were most likely to be retained rather than let go as firms slashed headcounts. Results were similar in Texas and in Dallas, within one to two percentage points of the national numbers.

Figure 3
Percent Laid Off, Furloughed, or Facing an Employer Closure due to COVID-19 (United States)

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Notes: Values shown are person-weighted percentages calculated from individual responses, aggregated by month based on survey window dates. Only survey participants who indicated that they did not work for pay or profit in the last seven days were prompted to specify the reason why.

Sources: Household Pulse Survey, United States Census Bureau; author's calculations.

LOCAL LOOK

Texas and Dallas show a similar connection between employment rates and educational attainment, but the month-to-month data from the Household Pulse Survey have higher variance, with a few months defying the overall trend. This variation is likely driven by the smaller sample sizes versus the country as a whole, as well as differences in regional and local labor market conditions.

To view data by state and metro area, or apply additional data filters, check out the Interactive Dashboard.

 

Another reason workers with postsecondary credentials were less affected by COVID-19 closures is that they were able to telework more often than were workers with a high school diploma alone. Figure 4 shows a stark divide in who worked from home across educational attainment groups at the national level. We find the same divisions at the local and state levels in Dallas and Texas, aligning with the notion that the types of jobs attainable with a postsecondary degree are structurally different than those attainable without one. Jobs that require a degree are more often low-contact (requiring fewer in-person interactions) and are therefore more accommodating of remote work. Jobs held by those with a high school diploma or less are more often high-contact, including many essential service jobs, and therefore prone to COVID-related disruptions. Sector- or industry-specific factors that are not considered here are also at play, such as the unique demands the pandemic has had on nursing, which usually requires at least an associate degree.

Figure 4
Percent Teleworking (United States)

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Notes: Values shown are person-weighted percentages calculated from individual responses, aggregated by month based on survey window dates. This question was first asked in August 2020 about any telework due to COVID-19. From April 2021 on, it asked specifically about the last seven days.

Sources: Household Pulse Survey, United States Census Bureau; author's calculations.

 

An additional reason people with lower attainment were without work more often was an unequal incidence of disease and care responsibilities. Throughout the pandemic, those with lower attainment were sick or serving as caregivers more often and were therefore less able to participate in the labor force, as seen in Figure 5. Percentages of respondents with a high school diploma who were sick, caring for someone sick, or concerned about getting or spreading COVID-19 peaked at 7% for the United States, 12% for Texas, and 10% for Dallas. The curves for every attainment level correspond to the overall trajectory of new cases during the pandemic, but educational attainment is still a clear differentiating factor.6 Some of the differences in outcomes by attainment are likely caused by mitigatory actions like remote work, private transportation, and food delivery, which are less accessible to various groups. However, another possible explanation is that those who pursue higher education may have or gain more access to information and resources, greater trust of institutions, and deeper support networks. These advantages, in turn, could influence behavior, like the decision to obtain a COVID-19 vaccine.7

Figure 5
Percent Sick, Caring for Someone Sick, or Concerned about Getting or Spreading COVID-19 (United States)

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Notes: Values shown are person-weighted percentages calculated from individual responses, aggregated by month based on survey window dates. Only survey participants who indicated that they did not work for pay or profit in the last seven days were prompted to specify the reason why.

Sources: Household Pulse Survey, United States Census Bureau; author's calculations.

 

Covering Costs

Meeting basic household needs has been another major economic challenge for many during the pandemic; as with employment, the Household Pulse Survey shows unequal COVID-19 impacts on those with postsecondary credentials and those without. Starting in August 2020, the Survey began asking participants how difficult it was to pay for household expenses in the prior week. These expenses include, but are not limited to, food, housing costs, car payments, medical bills, and student loans. Figure 6 depicts the percent of respondents who indicated it was very difficult to cover their usual expenses over the last week. Percentages were fairly steady over time within educational attainment groups, with a spike during winter 2020, when COVID-19 case counts were high and households may have also faced additional seasonal expenses. Once again, however, differences are evident when comparing across attainment groups. Graduates of a bachelor’s program were least likely to indicate difficulties paying for expenses. This holds true at the state and local levels as well. One reason for this is that degree holders were the least likely attainment groups to be laid off or unemployed, leaving their wages intact to cover household costs.

Figure 6
Percent Indicating “Very Difficult to Pay for Household Expenses in the Last Seven Days” (United States)

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Notes: Values shown are person-weighted percentages calculated from individual responses, aggregated by month based on survey window dates. The survey question about difficulty paying for usual household expenses was first posed in August 2020 and not collected in prior survey windows.

Sources: Household Pulse Survey, United States Census Bureau; author's calculations.

 

HOUSING AND FOOD SECURITY

The Household Pulse Survey also asked questions which specifically address housing and food security, beyond the umbrella of general household expenses. Survey respondents indicated their confidence in their ability to pay their rent or mortgage the next month and answered whether they had enough to eat over the past week. Trends for both questions followed a similar pattern to Figure 4, with insecurity peaking in winter 2020 and differences by educational attainment still apparent in the data.

Housing and food insecurity data, as with all metrics in this brief, are included in the Interactive Dashboard.

 

Another reason some attainment groups had more difficulty than others covering expenses is that those with higher educational attainment levels reported higher annual household incomes on the whole. Figure 7 shows that more than half of respondents with a high school diploma reported incomes of less than $50,000 per year, while degree holders tended to reside in households with higher annual incomes. One reason for this is the direct return on investment that comes with higher education; wages tend to rise with educational attainment.8 However, it is also worth noting that lower household incomes can limit access to any postsecondary education, often because costs are prohibitive.9 Disparities and inequities persist in educational attainment opportunities by income level, not to mention race, ethnicity, and gender. Beyond their effects on educational attainment, demographic factors have also had direct consequences on health, housing, and livelihoods during COVID-19.10

Figure 7
Respondents’ Reported Annual Household Income by Educational Attainment (United States)

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Notes: Values shown are person-weighted percentages calculated by aggregating individual responses from April 2020 to December 2021. Income ranges shown are calculated by grouping responses. Percentages do not include those who elected not to respond to this question.

Sources: Household Pulse Survey, United States Census Bureau; author's calculations.

EYE ON EQUITY

Educational attainment is not the only way to filter the Household Pulse Survey data. Striking differences in economic outcomes also appear during the coronavirus pandemic when drawing comparisons across lines of gender and race, for example, higher employment rates among men than women and greater difficulties with expenses among Black and Hispanic households than Asian and White ones.

The Interactive Dashboard can be used to group data by gender, race, income, and educational attainment.

Looking Ahead

This research brief used data from the United States Census Bureau’s Household Pulse Survey to examine how educational attainment has affected economic outcomes during the COVID-19 pandemic to date. Overall, compelling differences in economic outcomes suggest that higher education has served as a buffer or insulator of sorts against some of the economic shock of COVID-19. These findings are consistent with those at the national level, with similar but statistically noisy parallels evident in Dallas and Texas. With the rise of variants, the future path of COVID-19 is unclear, but people who possess postsecondary credentials, including associate and bachelor’s degrees, will likely be better positioned than those with a high school diploma alone to navigate labor markets and cover household expenses.

Higher education offers significant potential returns like economic security; however, it is not equally accessible to all. The pandemic itself disrupted postsecondary plans for many, deepening these divides. Figure 8 highlights how several respondents cancelled or scaled back their postsecondary plans due to COVID-19. This includes those with some college who are seeking to finish their degrees, those with an associate degree aiming for a bachelor’s, and so on.

Figure 8
Percent with Postsecondary Plans Who Canceled Plans or Took Fewer Classes due to the Pandemic (United States)

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Notes: Values shown are person-weighted percentages calculated from individual responses, aggregated by month based on survey window dates. The survey question about postsecondary education was first posed in August 2020 and not collected in prior survey windows. Only participants who indicated someone in their household was taking​ or planning to take postsecondary classes were asked how the pandemic had changed their plans.

Sources: Household Pulse Survey, United States Census Bureau; author's calculations.

Reductions in plans for postsecondary education may have lasting effects on people’s resilience to future economic shocks. Even as in-person learning has resumed, much work remains to ensure that access is equitable and that prospective students recognize and reap the long-run returns and stability that a credential can provide.