The College Payoff: Education, Occupation, Lifetime Earnings

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The steady rise of college costs and the mounds of debt students are shouldering to pay those costs has given rise to a recurrent question: Is college worth the cost?

Researchers at Georgetown University’s Center on Education and the Workforce say the answer is a resounding “yes” and offer a 33-page stack of facts and figures to back that up.

The College Payoff: Education, Occupation, Lifetime Earnings, a new study by the center’s Anthony P. Carnevale, Stephen J. Rose and Ban Cheah, uses lifetime earnings estimates to show that, on average, there are significant differences in how much is earned based on how much education is completed, ranging from high school dropout to doctoral graduates.

Using methodology developed by a U.S. Census study in 1999 that found that a worker with a bachelor’s degree would earn 75 percent more over his or her lifetime than a worker with just a high school diploma, the researchers used earning level data from 2009. The results are similar for today – but now college graduates earn 84 percent more over their lifetimes than high school graduates.

Speaking a news conference today before the release of the report Thursday evening, Carnavale said the “lifetime returns for a post-secondary education are, in fact, increasing and differences in attainment count for very substantial differences in lifetime earnings.”

For example, a worker with a master’s degree can expect to earn about $400,000 more than a worker with a bachelor’s degree. And a person with a doctoral degree can expect to earn nearly $600,000 more than a master’s degree holder, over a lifetime.

Carnavale emphasized that exactly how much a worker can expect in lifetime earnings is also dependent on one’s occupation: for example, engineers with a master’s degree will make more than a school teacher with the same level of education. But within the engineering field, differences in lifetime earnings are most attributable to what degree the worker has, and the same holds true in the field of teaching.

Carnevale emphasized that the “substantial” difference in earnings between a worker with a high school diploma and one with a bachelor’s degree would more than cover the cost of attending college.

He said the most disappointing findings of the study centered on the wide disparities between what women and minority workers earn compared with white, male workers, even in the same jobs and with the same credentials.

Jamie Merisotis, head of the Lumina Foundation, which along with the Bill and Melinda Gates Foundation underwrote the study, said it “explodes once again the myth that somehow a college education is worth less than it used to be.”

“It proves that idea is just wrong,” Merisotis said.

The Lumina and Gates foundations have been primary backers in research to improve college completion rates. They support a goal of having 60 percent of Americans holding a high-quality college degree or credential by 2025. That would be almost 50 percent jump from the current percentage, which places the U.S. tied for 10th in the world in post secondary education, Merisotis said.

To reach the goal, he said, colleges cannot continue to conduct business as usual, with its emphasis on seat time (the amount of time spent in a classroom to each a credit).  Colleges must be more flexible, more student-centered, accountable and accessible, he said. 

“America’s future depends … on having college-educated workers,” Merisotis said.

Considering the problems that new college graduates have had landing jobs in the recession and slow recovery, Carnavale was asked if a sudden rise in the number of college educated workers would wipe out the earning differences between various levels of education.

He said such an increase might dilute the differences somewhat – perhaps drop the greater earnings of a college graduate over a high school graduate to 50 percent instead of 84 percent.  But he said an influx would also help to raise the earnings of the high school graduate because, percentage wise, there would be fewer of them.

The study, written in easy-to-understand language that steers clear of educational jargon, includes lists of the most popular occupations at each level of educational attainment and provides charts for possible earning capacity for some 400 occupations.