How does a college education impact income inequality? University of Wisconsin-Stevens Point junior Kyle Pulvermacher took on this question as part of research he will present at the UW System Research in the Rotunda event on March 8 in Madison.
Held at the State Capitol, the event invites undergraduates from across the UW System to showcase their student research. Pulvermacher is among six UW-Stevens Point students who will present their work at the annual event, sharing it with state legislators and government officials as well as their peers across the system.
Pulvermacher, an actuarial mathematics major and economics minor from Waupaca, found a strong correlation between higher education and higher income during his research. He collaborated with his economics professor and UWSP Center for the Business and Economic Insight, or CBEI, Director Scott Wallace, who has previously published analysis on U.S. income equality.
Wallace said he was impressed with Pulvermacher’s creativity and his strong quantitative mathematics background. Pulvermacher works part-time in the CBEI as a research assistant, helping to produce university reports on economic indicators for the local community.
After months of data analysis, Pulvermacher’s biggest obstacle was finding adequate, relevant sources for his literature review. As he studied the factors that contributed to economic inequality in Wisconsin, he was able to show an economic relationship between the variables and draw a conclusion: Wisconsin counties with higher levels of college-educated populations have greater income inequality.
The U.S. Census Bureau calculates income inequality as the ratio of the mean income for the top 20 percent of earners divided by the mean income of the bottom 20 percent in a particular county.
Pulvermacher said his study results are consistent with economic literature pointing to how a rising imbalance in the supply and demand of high-skilled labor has resulted in rapid income gains to college-educated workers, leaving behind those without a college degree.
The data indicates that, on average, counties with higher rates of postsecondary educational attainment have greater income inequality, he said. Moreover, this positive relationship was found to be statistically significant.
“These results, in combination with further research, led me to my conclusion that greater income gains were made by college graduates in Wisconsin,” he said. “Additionally, the results were consistent with data showing a clear shortage of college-educated workers in Wisconsin.”
In terms of salary disparity, the average earnings of those completing a bachelor’s degree over the past decade have increased by about $13,000, while those who finished their education as a high school graduate have increased by $4,000, according to the U.S. Bureau of Labor Statistics.
Pulvermacher and Wallace are both attending Research in the Rotunda for the first time, viewing the student work that has been carefully crafted after weeks of in-depth research and analysis.
The findings of Pulvermacher’s income inequality data provide a meaningful call to action, Wallace said. “We must expand opportunities to help people attain higher levels of higher education, creating less of a gap and bringing everyone up.”
To meet the growing workforce demand, four-year universities and technical colleges will play a key role in preparing future employees to enter the labor force.
Pulvermacher said he’s pleased with his research experience. Yet, presenting under the Capitol rotunda, in front of peers in the UW System, state legislators and other state leaders, comes with a level of pressure, he said.
“Kyle is exceptional, curious and ambitious and just one of the nicest people you can meet,” Wallace said.
To enter the actuarial field, Pulvermacher will have to master a series of preliminary exams. His probability professor and class adviser, Hurlee Gonchigdanzan, said Pulvermacher has the mathematical mind and talent for it. He already passed his first mandatory exam with a high score.
He will be an actuary intern at Sentry Insurance in Stevens Point this summer.
Source: UW-Stevens Point
