Academic journal article Monthly Labor Review

Is a College Degree Still Worth It?

Academic journal article Monthly Labor Review

Is a College Degree Still Worth It?

Article excerpt

In "Do the benefits of college still outweigh the costs?" (Federal Reserve Bank of New York, Current Issues, vol. 20, no. 3, 2014), economists Jaison R. Abel and Richard Deitz find that despite the soaring cost of attending college, the financial benefits of higher education still outweigh the expenses.

"In recent years, students have been paying more to attend college and earning less upon graduation--trends that have led many observers to question whether a college education remains a good investment," the report states. The authors analyzed the earnings since the 1970s of workers with bachelor's degrees, workers with associate's degrees, and workers with high school diplomas to determine that college remains a good investment.

A key reason why a degree remains a relatively valuable asset despite rising tuition is that the wages of those Americans without a degree have been falling, keeping the college wage premium near an alltime high, according to the report. Between 1970 and 2013, workers with a bachelor's degree (excluding those who went on to a postgraduate degree) had annual earnings of about $64,500 after adjustment for inflation. Workers with an associate's degree earned an adjusted $50,000 per year, and those with only a high school diploma earned $41,000. The authors calculate that, over four decades, workers with a bachelor's degree earned on average 56 percent more and workers with an associate's degree averaged 21 percent more than high school graduates. …

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