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What is a College Degree Worth?

Thu Sep 08 2011
Tiffany Julian
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A college degree has long been considered the golden ticket to success in life. High schools and parents constantly reinforce the importance of obtaining a college degree to the young adults in their life. With the rising costs of tuition, room and board and meal plans, the question remains: is a college diploma worth the time and investment? Will a college degree provide a job seeker with an advantage over other competitors in the job market?

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 According to a report released by the US Census Bureau, there is a correlation between higher education and work-life earnings. The Education and Synthetic Work-Life Earnings report showed that education had more effect on work-life earnings than other demographic factors, such as race, gender and Hispanic origin. For example, a Hispanic male worker who has a professional degree is expected to make $3.1 million over a 40-year work-life, whereas someone with an eighth grade level of education or lower will make $977,000.

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The report shows that factors such as race, Hispanic origin, gender, citizenship, English-speaking ability and geographic location influence work-life earnings, though none of these characteristics has a greater impact on earnings than education. For two people who are alike in all ways but education, the estimated annual difference in life earnings between a professional degree and an eighth grade education was about $72,000. This analysis reflects a strong correlation between education and earnings.

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This report also shows that even women in the most advantaged race groups earn less than men, in the most economically disadvantaged race groups. Generally, Asian men and women with a Bachelor’s degree or higher had greater returns on higher education than blacks or Hispanics of either gender. So what does this mean to a recent high school graduate? And what does this mean for a working professional considering college? Is the struggle really worth it? At least in economic terms, the answer is yes. The relationship between higher education and work-life earnings does have a positive correlation.

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Tiffany Julian, Housing and Household Economic Statistics Division, US Census Bureau

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