College Education Gives Earnings Advantage, But Gap Narrows
A college degree still provides a significant earnings bump to individuals, but the value has declined slightly in comparison with those who earn only a high school degree, a new study shows.
The College Board's Education Pays 2013 report, released Monday, underscores the payoff from higher education and highlights other ways a degree translates into more active, healthier, engaged citizens.
Having a bachelor's degree or higher, on average, increases earnings 69 percent for men and 70 percent for women in 2011 over those individuals ages 25 to 34 who only completed high school. By comparison, in 2008, higher education led to a 74 percent income advantage for men and 79 percent for women, according to the College Board's latest research.
In 2011, graduates with a bachelor's degree working full-time, on average, made $56,600 a year, which was $21,000 more than the median earnings of a high school graduate. Even having some college education, but no degree, improved wages by 14 percent.
Having a degree helped many young people weather the recent economic downturn. The trends report notes that the 2012 unemployment rate was 4.1 percent for college graduates and 11.2 percent for workers with just high school education age 25 to 34.
Still, the College Board report acknowledges the controversy over the value of a college degree at a time when tuitions costs are rising, student loan debt is expanding, and the job market remains flat. This year it published a companion report, How College Shapes Lives, to explain some of the complicating factors that underlie the college outcome analysis.
For instance, although the gap in average earnings between college graduates and others does not increase every year, it has grown over time and the income advantage increases as graduates advance in their careers. Also, College Board notes that conflicting predictions of future needs for educated workers are linked to differing definitions and methodologies, yet employers pay a premium for employees with postsecondary credentials and that will likely continue. While it can be hard to measure as an immediate payoff, the report suggests having a college degree opens the door to further education and opportunites.
The Education Pays reports highlights the benefits of higher education beyond money.The College Board found:
- College-educated adults are more likely than others to receive health insurance from their employers (69 percent for those with bachelor's degrees, 73 percent for those with advanced degrees, and 55 percent for full-time workers with a high school education.)
- About 42 percent of four-year college graduates volunteer for organizations, compared with 29 percent of those with a two-year degree or some college, and just 17 percent of high school graduates.
- In 2012, about 80 percent of college graduates ages 45 to 64 voted, while 69 percent of high school graduates did.
- College graduates are less likely to smoke or be obese than those with less education.