Never before in U.S. history has the quality of human resources--the skills and education of its people-been so important to the economic prospects of states and their residents. Within the next 20 years, the nation will lack 14 million people with postsecondary education unless states realize significant improvements in high school and postsecondary performance. High school and postsecondary completion rates and college readiness need to improve, particularly among disadvantaged populations. Governors and state legislators can influence how high schools and colleges spend their resources through fiscal incentives that encourage schools to improve students' outcomes, chiefly college readiness and high school and postsecondary completion rates. (Contains 47 endnotes.)