Every few years the College Board (yes, the organization that administers the SAT and other standardized exams) issues a major report on the economic benefits of higher education—particularly attainment of a bachelors degree. Their latest report, “Education Pays 2010” was released on September 20th.
There were no major surprises in this year’s report. With all the justified focus on the rising cost of higher education in the US, it is nice to realize a college education is still a good investment for people. The report concluded:
- Individuals with higher levels of education earn more and are more likely than others to be employed.
- Median earnings of bachelor’s degree recipients working full time year-round in 2008 were $55,700, $21,900 more than median earnings of high school graduates.
- Individuals with some college but no degree earned 17% more than high school graduates working full-time year-round. Their median after-tax earnings were 16% higher.
- For young adults between the ages of 20 and 24, the unemployment rate in the fourth quarter of 2009 for high school graduates was 2.6 times as high as that for college graduates.
There are indirect economic and individual benefits as well for college graduates:
- College-educated adults are more likely than others to receive health insurance and pension benefits from their employers and be satisfied with their jobs.
In addition to these direct economic benefits to individuals, the report identified a number of broader societal economic benefits as well. Higher education is a good investment for the country, according to the College Board:
- College education leads to healthier lifestyles, reducing health care costs for individuals and for society.
- Adults with higher levels of education are more active citizens than others.
- Federal, state, and local governments enjoy increased tax revenues from college graduates and spend less on income support programs for them, providing a direct financial return from investments in postsecondary education.
Although the percentage of college attainment in the US is relatively low—too low, in my opinion, to support the more sophisticated, abstract, higher-level jobs of the future—the proportion of US college graduates is trending in the right direction.
- The proportion of adults in the United States between the ages of 25 and 34 with a four-year college degree held steady at 24% in the 1980s, but grew from 29% in 2000 to 32% in 2009.
Economic benefits of higher education are not limited to attainment of an initial 4-year bachelor degree. In a previous blog post, I wrote about the economic impact of UCLA Extension that included increased earning power of students who completed professional and continuing education programs at our institution.
Should higher education reach and serve more people? Of course. Can higher education institutions be more efficient while maintaining quality outcomes? Yes, we can. But is higher education still worth it to you and your family? Most definitely.