Second-worst-educated no longer: the last two years have seen unprecedented gains in the state's percentage of college-educated.

• Author: Barkey, Patrick M.
• Position: Indiana Indicators

FOR SEVERAL DECADES, Indiana has suffered the ignominious fate of being one of the more poorly educated states in the nation, especially as it relates to college education. As recently as four years ago, Census data indicated that just 17.1 percent of Hoosiers age 25 or above had a four year college degree, compared to the national average of 25.6 percent. Only West Virginia fared worse.

For those of us who work for higher-education institutions, that's a statistic that makes us wince. In fact, for much of the 1980s and 1990s, when the Indiana economy appeared to prosper in the midst of two long periods of national economic expansion, that's about all that most of us did. Over time, our educational attainment improved, but no more than it did in competing states, so that we made little or no progress in closing the gap in the educational levels of our workforce.

Some saw this, if anything, as a stain on our educational system's reputation. But an Indiana Fiscal Policy Institute study published in 1998 appeared to point the finger at our economy, instead. Using data from the March supplement to the Current Population Survey (CPS) produced by the Bureau of the Census, the study concluded that demand for college-educated workers in Indiana was quite weak, even when compared to other manufacturing-dominated Midwest states.

In fact, Indiana's economy ranked dead last in the share of professional and specialty occupations represented in its labor force. On the flip side, our labor force had more workers in production-related occupations than any other state. The message was clear--without a larger presence of industries that employ college-educated workers in the state economy, there was little reason to expect their numbers to grow here.

It's a crucial issue for our state's economic development for several reasons. When it comes to job growth and earnings growth in the national economy, the biggest strides have been made in white-collar occupations where college degrees are required. Between 1988 and 1996, three out of every four net new jobs created were professional or managerial. There's also evidence that cities and regions with higher educational attainment levels are more able to adapt to structural changes in the economy that displace workers.

But as policymakers all over the state have finally begun to honestly address and grapple with this thorny problem, a funny thing has happened. The data that we have relied on to benchmark our...