The education services industry is made up of establishments that provide instruction and training on a wide variety of subjects. These institutions, which include schools, colleges, universities, and training centers, may be either privately or publicly owned.
The industry is generally considered to be counter-cyclical – that is, when the economy is weak and unemployment is rising, more working adults decide to invest in further education. This leads to higher enrollment and increased profit at schools. Meanwhile, traditional education for young students is generally non-cyclical.
The advent of technology and online collaboration is leading to improved enrollment rates and profit generation for schools. While educational services were once considered applicable to mostly young people, the global war for talent is leading to increasing pressure on workers to enhance their skills.
There are two important trends in favor of the education services industry. First, as the U.S. continues to transition from a manufacturing-based economy to one reliant on the service sector, for-profit educators have new opportunities by offering courses in informational technology, healthcare, and business management. Second, these companies have the opportunity to tap into large under-educated segments of the world populations, in lucrative markets such as China, Brazil, and other developing nations.
According to the latest figures from the Bureau of Labor Statistics (BLS), the private education segment added 7,000 jobs in July 2014.
DCR TrendLine Education Services Employment Index
In the fall of 2012, about 76.3 million people were enrolled in American schools and colleges. And about 4.7 million people were employed as elementary and secondary school teachers or as college faculty. Other professional, administrative, and support staff at educational institutions totaled to 5.6 million.
Projected Education Market Size (in billion dollars)
In 2011, a White House study found that the total annual U.S. expenditure on education was estimated at approximately $1.3 trillion, with K-12 education accounting for close to half of this figure. Almost 9 percent of total U.S. GDP is spent on education, making it the second largest market, behind healthcare, in the country. There are about 100,000 public schools, 30,000 private schools, and roughly 4,000 charter or other schools in the K-12 space in the U.S.
U.S. and Global Education Spending
Source: Executive Office of the President, Council of Economic Advisors
A report issued by IBIS Capital in 2013 found that the fastest-growing sector of educational services is eLearning, which is expected to grow by 23 percent by 2017. The global education market is expected to be worth about $4.4 trillion currently.
Global Education Expenditure
Source: IBIS Capital
The number of public school teachers has increased by a larger percentage than the number of public school students over the past decade, resulting in declines in the pupil/teacher ratio
In public schools between 1985 and 2012, there was a 30 percent increase in elementary education (pre-kindergarten through grade 8), compared with a 19 percent increase in secondary enrollment (grades 9 through 12). Between the fall of 1985 and fall of 2010, enrollment in prekindergarten increased by 745 percent, while enrollment in other elementary grades increased by 24 percent.
U.S. Enrollment and Teacher Ratio
Employment and Wages for Teachers
Recent analysis by the Thomas B. Fordham Institute shows that the growth of non-teaching workers has largely outpaced student growth over the past 40 years. From 1970 to today, non-teachers, such as administrators, counselors, teacher aides and cafeteria workers, jobs have increased by 130 percent to make up over 50 percent of all public school employees. While overall school staffing has grown by approximately 377 percent, most of this growth is attributed to the number of teacher aides.
Average Number of Staff per 1,000 Students in U.S. School Districts, 1950 to 2010
Source: Fordham Institute
A 2013 survey of educator job satisfaction by Monster.com found that 23 percent of teachers were satisfied with their jobs, while 47 percent expressed dissatisfaction. The National Education Association found that the national average starting teacher salary for 2012-2013 is $36,141. The highest salary at $51,539 is found in the District of Columbia, while the lowest at $27,274 is in Montana.
Education Services Wages and Salaries Index, 2010 to 2014
Job Title Focus – Elementary School Teachers
The BLS defines the job title of ‘Elementary School Teachers, Except Special Education” as teachers who teach students basic academic, social and other formative skills in public or private schools at the elementary level. As of May 2013, the employment estimate for this occupation is 1,344,240 with a mean annual wage of $56,320. The states with the highest employment level for elementary school teachers are Texas, California, New York, Florida, and Illinois.
Employment of elementary school teachers is expected to grow at about 12 percent through 2022. This growth is attributed to job openings for new teachers resulting from older teachers reaching retirement age between 2012 and 2022. Another cause for the growth in demand for teachers will be due to expected growth in student enrollment, particularly in the South and the West.
Top Paying States for Elementary School Teachers