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College wage premium

Tuesday, May 13, 2014

College pays: Read the research that documents the wage premium attached to a college degree

Read the research that documents the wage premium attached to a college degree.

Recent studies, including an analysis by the San Francisco Federal Reserve Bank, document the lifetime earnings advantage that flows from a college education. 

"Is It Still Worth Going to College?" says the average college graduate can recover the costs of attending in less than 20 years and earn $800,000 more than the average high school graduate by retirement age.

Published earlier this month by the San Francisco Fed's Mary C. Daly and Leila Bengali, the study also argues efforts to make college more accessible would be time and money well spent.   

Other non-partisan, non-profit studies include: 

The data, however, remain clear: even at current prices, postsecondary education pays off for most people. Promising occupational and personal opportunities are disproportionately available to college graduates.-- "Higher Education Earnings Premium: Value, Variation, and Trends" (PDF), a February 2014 study by Sandy Baum for the Urban Institute.

College can bring a lot of debt, yes. But these figures serve as a reminder that college also brings huge returns relative to how you might otherwise invest your tuition money. -- "College Premium: Better Pay, Better Prospects," a Feburary 2013 New York Times column by Catherine Rampell.

The college wage premium has been a central focus for researchers because it is both large and growing. Current data indicate that college degree holders enjoy an 84 percent increase in earnings over their high-school-educated counterparts. -- "The College Wage Premium," an August 2012 commentary for the Federal Reserve Bank of Cleveland by economist Jonathan James.

Factor in St. Cloud State's relatively modest tuition, and the arguement for a college degree becomes that much more compelling. Only 23 of Forbes magazine's 2013 "America's Top Colleges" cost less than St. Cloud State, on an annual basis. See the news story.

If you question the motivations or methodologies of the aforementioned studies -- do your own analysis. College Board, the New York-based purveyors of the SAT test and the Advanced Placement Program, publishes raw data on weekly earnings, median earnings, lifetime earnings, tax payments and more -- all tied to education level.    

 

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