The Value of Your Degree
According to research released this year by the Economic Policy Institute in Washington D.C. the benefits of obtaining a bachelor’s degree are substantial. Last year graduates in America with four-year degrees earned an average of over 90% more per hour than their less educated counterparts(*1). What is especially interesting is the fact that this pay gap percentage has increased from 64% in the early 1980’s and that college graduation rates have also increased which indicates that there are not enough graduates in the job market to fulfill the current employer demand for them. An economist at M.I.T., David Autor, echoed this sentiment: “We have too few college graduates…” “We also have too few people who are prepared for college”. So the question still begs, “Is the cost of my degree worth the outcome?” Well a study by Mr. Autor, citing the efforts of economists other economists as well, arrives at the conclusion that not attending college could cost $500,000! (*2) How you ask? The calculation can be summarized as: cost of tuition minus the staggering pay gap between the average earnings of university graduates and high school graduates. Of course considerations are made concerning inflation and the time it takes to earn a degree. Studies at the Center on Education and the Workforce at Georgetown University also reflect significant gains associated with attaining a degree (*3).
Typically the primary concern for students is the amount of money required for college but since the average debt amongst four-year degree recipients is $25,000 (*4) the potential earning increase far outweighs such worries. These correlations amongst college degrees and salary however do not include people who have earned credits but not graduated and community college graduates. The unemployment rate in April of 2014 for people with a 4 year degree between 25 and 34 years of age was only 3%. A bachelor’s degree or its equivalent is the way to go.References:
(*1) – http://www.epi.org/publication/top-charts-2013/
(*2) – https://www.aeaweb.org/jep/app/2601_Avery_Turner_app.pdf
(*3) – http://cew.georgetown.edu/
(*4) – https://lp.collegeboard.org/trends
(*5) – http://www.bls.gov/emp/ep_chart_001.htm