Trends in Higher Education Series Education Pays 2013 The Benefits of Higher Education for Individuals and Society

Sandy Baum Jennifer Ma Kathleen Payea About the College Board The College Board is a mission-driven not-for-profit organization that connects students to college success and opportunity. Founded in 1900, the College Board was created to expand access to higher education. Today, the membership association is made up of over 6,000 of the world’s leading educational institutions and is dedicated to promoting excellence and equity in education. Each year, the College Board helps more than seven million students prepare for a successful transition to college through programs and services in college readiness and college success — including the SAT® and the Advanced Placement Program®. The organization also serves the education community through research and advocacy on behalf of students, educators and schools. For further information, visit www.collegeboard.org.

Trends in Higher Education The Trends in Higher Education publications include the Trends in College Pricing, Trends in Student Aid, and Education Pays series in addition to How College Shapes Lives: Understanding the Issues and other research reports and topical analysis briefs published periodically. These reports are designed to provide a foundation of evidence to strengthen policy discussions and decisions.

In addition to the figures and tables included in this report, more information and data can be found on the Trends in Higher Education website: trends.collegeboard.org

About the Authors Sandy Baum Research Professor, George Washington University Graduate School of Education and Human Development and Senior Fellow, the Urban Institute [email protected]

Jennifer Ma Independent Consultant for the College Board [email protected]

Kathleen Payea Policy Analyst, the College Board [email protected]

The tables supporting all of the graphs in this report, a PDF version of the report, and a PowerPoint file containing individual slides for all of the graphs are available on our website at trends.collegeboard.org. Please feel free to cite or reproduce the data in this report for noncommercial purposes with proper attribution.

For inquiries or ordering hard copies, please contact: [email protected]

© 2013 The College Board. College Board, Advanced Placement, Advanced Placement Program, SAT and the acorn logo are registered trademarks of the College Board. All other products and services may be trademarks of their respective owners. Visit the College Board on the Web: www.collegeboard.org.

2 Education Pays 2013 Part 1: Individual and Societal Benefits Contents

5 Executive Summary 7 Introduction 10 Part 1: Individual and Societal Benefits of Higher Education Earnings 11 Education, Earnings, and FIGURE 1.1 Median Earnings and Tax Payments by Education Level, 2011 Tax Payments 12 Lifetime Earnings FIGURE 1.2 Lifetime Earnings Relative to High School Graduates by Education Level 13 Earnings Premium Relative FIGURE 1.3 Cumulative Earnings Net of Loan Repayment for Tuition and Fees, by to Price of Education Education Level 14 Earnings by Race/Ethnicity, FIGURE 1.4 Median Earnings by Race/Ethnicity, Gender, and Education Level, 2009–2011 Gender, and Education Level 15 Earnings by Gender and FIGURE 1.5 Median, 25th Percentile, and 75th Percentile Earnings by Gender and Education Level Education Level, 2011 16 Earnings over Time by FIGURE 1.6 Median Earnings by Gender and Education Level, 1971–2011 Gender and Education Level 17 Earnings Paths FIGURE 1.7A Median Earnings of Full-Time Workers by Age and Education Level, 2009–2011 FIGURE 1.7B Median Earnings of All Workers by Age and Education Level, 2009–2011 Other Economic Benefits 18 Employment FIGURE 1.8A Number Employed, Unemployed, and Not in the Labor Force by Education Level, 2002, 2007, and 2012 FIGURE 1.8B Labor Force Participation Rates by Age and Education Level, 2012 19 Unemployment FIGURE 1.9A Unemployment Rates by Education Level, 1992−2012 20 Unemployment FIGURE 1.9B Unemployment Rates by Age and Education Level, 2012 FIGURE 1.9C Unemployment Rates by Race/Ethnicity and Education Level, 2012 21 Job Satisfaction FIGURE 1.10A Sense of Learning New Things on the Job by Education Level, 2002, 2006, and 2010 FIGURE 1.10B Work Satisfaction Rates by Education Level, 1972–2012 22 Social Mobility FIGURE 1.11 Family Income Quintiles by Education and Parents’ Family Income, 2000–2008 23 Pension Plans FIGURE 1.12A Pension Plan Coverage by Education Level, 1991, 2001, and 2011 FIGURE 1.12B Participation Rates in Pension Plans by Education Level, 2011 24 Health Insurance FIGURE 1.13A Health Insurance Coverage of Full-Time Workers by Education Level, 1991, 2001, and 2011 FIGURE 1.13B Health Insurance Coverage of Part-Time Workers by Education Level, 1991, 2001, and 2011 25 Poverty FIGURE 1.14A Poverty Rates by Household Type and Education Level, 2011 FIGURE 1.14B Living Arrangements of Children by Poverty Status and Parents’ Education Level, 2011 26 Public Assistance Programs FIGURE 1.15 Public Assistance Program Participation Rates by Education Level, 2011 Health Benefits 27 Smoking FIGURE 1.16A Smoking Rates by Education Level, 1940–2012 FIGURE 1.16B Smoking Histories by Education Level, 2012 28 Exercise FIGURE 1.17A Exercise Rates by Age and Education Level, 2012 FIGURE 1.17B Participation in Aerobic Activities by Education Level, 2011 29 Obesity FIGURE 1.18A Adult Obesity Rates by Gender and Education Level, 1988–1994 and 2007–2010 FIGURE 1.18B Childhood Obesity Rates by Gender and Highest Education Level in the Household, 1988–1994 and 2007–2010

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 3 Contents — Continued

Other Individual and Societal Benefits 30 Parents and Children FIGURE 1.19A Time Mothers Spend on Children, by Employment Status and Education Level, 2003–2012 FIGURE 1.19B Time Mothers Spend on Children, by Type of Activity, Age of Youngest Child, Mother’s Employment Status and Education Level, 2003–2012 31 Civic Involvement FIGURE 1.20A Understanding of Political Issues by Education Level, 2012 FIGURE 1.20B Rates of Volunteering by Education Level, 2012 32 Voting FIGURE 1.21A Voting Rates by Age and Education Level, 2010 and 2012 FIGURE 1.21B Voting Patterns by Age and Education Level, 2012 33 Part 2: The Distribution of the Benefits: Who Participates and Succeeds in Higher Education? College Enrollment 34 College Enrollment FIGURE 2.1 Enrollment Rates by Family Income, 1987–2012 by Income 35 College Enrollment by FIGURE 2.2A Enrollment Rates of Recent High School Graduates by Race/Ethnicity, Race/Ethnicity 1974–2011 FIGURE 2.2B Enrollment Rates of All 18- to 24-Year-Olds by Race/Ethnicity, 1974–2011 36 College Enrollment by FIGURE 2.3A Enrollment Rates of Recent High School Graduates and of All 18- to Gender and Age 24-Year-Olds by Gender, 1971–2011 FIGURE 2.3B Enrollment Rates of All 18- to 34-Year-Olds by Age, 1971–2011 37 Stratification Within FIGURE 2.4A Family Income by Postsecondary Sector, 2011-12 Higher Education FIGURE 2.4B Postsecondary Sector by Family Income, 2011-12 38 Stratification Within FIGURE 2.5 Percentage of High School Seniors Academically Undermatched by Higher Education Socioeconomic Status, 2004 Educational Attainment 39 Degrees and FIGURE 2.6A Postsecondary Degrees and Certificates Awarded, 2011-12 Certificates Awarded FIGURE 2.6B Degrees and Certificates Awarded by Sector, 2011-12 FIGURE 2.6C Number of Certificates Awarded by Type, 2001-02 and 2011-12 40 College Completion FIGURE 2.7A Postsecondary Completion for Students Beginning Postsecondary Study in 2006 FIGURE 2.7B Postsecondary Completion by Dependency Status and Family Income, 1989-90, 1995-96, and 2003-04 41 Educational Attainment FIGURE 2.8A Educational Attainment over Time, 1940–2012 Over Time FIGURE 2.8B Educational Attainment by Age Group, 2002 and 2012 42 Educational Attainment by FIGURE 2.9 Educational Attainment by Race/Ethnicity and Gender, 1973–2012 Race/Ethicity and Gender 43 Science, Technology, FIGURE 2.10A Beginning Four-Year College Students Who Earned Bachelor’s Degrees, Engineering, or Mathematics Percentage Persisting in the Fields They Entered (STEM) Fields FIGURE 2.10B High School Graduates Entering Four-Year Colleges, Graduating in STEM Fields, and Employed in STEM Fields FIGURE 2.10C Majors of Bachelor’s Degree Recipients by Occupation, 2009 Geographic Comparisons 44 College Enrollment and FIGURE 2.11 Educational Attainment by State Attainment by State 45 International Comparisons: FIGURE 2.12 International Expenditures on Higher Education Institutions from Public, Public Spending on Household, and Other Private Sources, 2010 Higher Education 46 References

4 EDUCATION PAYS 2013 Executive Summary

Education Pays 2013: The Benefits of Higher Education for from 54% ($15,200) for 25- to 29-year-olds to 86% ($32,000) Individuals and Society documents differences in the earnings for 45- to 49-year-olds (Figure 1.7A). and employment patterns of U.S. adults with different levels of ––The 2012 unemployment rate for four-year college graduates education. It also compares health-related behaviors, reliance ages 25 to 34 was 7.1 percentage points below that for high on public assistance programs, civic participation, and indicators school graduates. The unemployment rates for those with of the well-being of the next generation. Financial benefits are associate degrees and with some college but no degree easier to document than nonpecuniary benefits, but the latter were 4.0 and 1.6 percentage points below that for high school may be as important to students themselves, as well as to the graduates, respectively (Figure 1.9B). society in which they participate. Our goal is to call attention to ways in which both individuals and society as a whole benefit The financial return associated with college from increased levels of education. credentials and the gaps in earnings by Our focus is on outcomes correlated with levels of educational education level have increased over time. attainment, and it is important to be cautious about attributing ––Between 2008 and 2011, the gap between the median all of the differences observed to causation. However, reliable earnings of high school graduates ages 25 to 34 and those statistical analyses support the significant role of postsecondary in the same age range with a bachelor’s degree or higher education in generating the benefits reported. declined from 74% to 69% for men and from 79% to 70% for women, but the long-term trend is upward (Figure 1.6). Many of the averages we report conceal considerable variation among people with similar levels of education. More information on ––The difference between median earnings for women ages 25 this variation can be found in this report’s companion publication, to 34 working full time year-round with a bachelor’s degree How College Shapes Lives: Understanding the Issues. or higher and those in the same age range with high school diplomas rose from 43% in 1971 to 56% in 1991 and to 70% Education Pays 2013 also examines the increases and the in 2011. The earnings premium for men rose from 25% in 1971 persistent disparities across demographic groups in college to 56% and in 1991 and to 69% in 2011 (Figure 1.6). participation and completion. The magnitude of the benefits of postsecondary education makes ensuring improved access for Federal, state, and local governments enjoy all who can benefit imperative. increased tax revenues from college graduates This executive summary highlights key ideas in the report. and spend less on income support programs for them, providing a direct financial return on THE BENEFITS OF HIGHER EDUCATION investments in postsecondary education. ––In 2011, 12% of high school graduates ages 25 and older lived Individuals with higher levels of education in households that relied on SNAP (Supplemental Nutritional earn more and are more likely than others to Assistance Program) benefits, compared to just 2% of those be employed. with at least a bachelor’s degree. The pattern was similar for ––Median earnings of bachelor’s degree recipients with no the National School Lunch Program (Figure 1.15). advanced degree working full time in 2011 were $56,500, $21,100 more than median earnings of high school graduates. College-educated adults are more likely Individuals with some college but no degree earned 14% than others to receive health insurance and more than high school graduates working full time. Their pension benefits from their employers. median after-tax earnings were 13% higher (Figure 1.1). ––In 2011, employers provided pension plans to 52% of full- ––Compared to a high school graduate, the median four-year time workers with high school diplomas, 65% of those with college graduate who enrolls at age 18 and graduates in four bachelor’s degrees, and 73% of those with advanced degrees years can expect to earn enough by age 36 to compensate (Figure 1.12A). for being out of the labor force for four years, as well as for ––In 2011, employers provided health insurance to 55% of full- borrowing the full amount required to pay tuition and fees time workers with high school diplomas, 69% of those with without any grant assistance (Figure 1.3). bachelor’s degrees, and 73% of those with advanced degrees ––Although 16% of male high school graduates earned as much (Figure 1.13A). as or more than the median earnings of male four-year college graduates in 2011 ($66,200), 84% earned less (Figure 1.5). Adults with higher levels of education are more active citizens than others. ––As workers age, earnings rise more rapidly for those with higher levels of education. For example, the gap between ––In 2012, 42% of four-year college graduates, 29% of adults the earnings of full-time workers whose highest degree is a with some college or an associate degree, and 17% of high bachelor’s degree and those of high school graduates grows school graduates volunteered for organizations (Figure 1.20B).

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 5 ––Among adults ages 45 to 64, 59% of high school graduates ––The gaps between the college enrollment rates of black and 80% of bachelor’s degree recipients voted in the 2012 and Hispanic high school graduates and white high school election (Figure 1.21A). graduates narrowed considerably between 2001 and 2011, when 70% of white, 66% of black, and 62% of Hispanic College education leads to healthier lifestyles, high school graduates enrolled in college within a year of reducing health care costs. completing high school (Figure 2.2A). ––The gap between the smoking rates of four-year college ––Thirty-eight percent of dependent undergraduate students graduates and high school graduates increased from 2 from families with incomes below $29,600 enrolled in public percentage points in 1962 to 13 points in 1982, and to 17 two-year colleges in 2011-12, and 10% enrolled in for-profit points in 2012 (Figure 1.16A). institutions. In contrast, 22% of undergraduate students from families with incomes of $106,360 or higher enrolled in public ––Within each age group, college-educated adults are less two-year colleges, and 2% attended for-profit institutions likely than others to be obese. In addition, children living in (Figure 2.4B). households with more educated parents are less likely than other children to be obese (Figures 1.18A and 1.18B). ––Enrolling at institutions that are less selective than those for which students are academically qualified is most common College-educated mothers spend more time among those from lower socioeconomic backgrounds. Most with children and alter the composition of of this enrollment pattern is explained by where students that time to suit children’s developmental apply rather than by admission decisions (Figure 2.5). needs more than less educated mothers. ––In 2007-08, the percentage of young people enrolling in college within a year after they were scheduled to graduate ––Among both those who are employed and those who are from high school ranged from 29% in Nevada and 30% in not, the amount of time mothers spend on their children’s the District of Columbia to 61% in Massachusetts and South activities increases with levels of education (Figure 1.19A). Dakota (Figure 2.11). College education increases the chances that Educational attainment rates are increasing, adults will move up the socioeconomic ladder. but college completion rates and attainment ––Of adults who grew up in the middle family income quintile, patterns differ considerably across 31% of those with a four-year college degree moved up to the demographic groups. top income quintile between 2000 and 2008, compared with just 12% of those without a four-year college degree (Figure 1.11). ––Among students who began college in 2006 at the age of 24 or younger and enrolled exclusively full time, 78% had earned Substantial evidence indicates that the a degree or certificate six years later (Figure 2.7A). associations described above are the result of ––The percentage of adults in the U.S. between the ages of 25 increased educational attainment, not just of and 34 with a four-year college degree grew from 6% in 1950 individual characteristics. to 24% in 1980 and 1990. In 2012, 34% of adults in this age group had earned a bachelor’s degree or higher (Figure 2.8A). PARTICIPATION AND SUCCESS IN ––In 2012, the percentage of 25- to 29-year-olds with at least HIGHER EDUCATION a bachelor’s degree ranged from 11% for Hispanic males to 43% for white non-Hispanic women (Figure 2.9). Although college enrollment rates continue to rise, large gaps in enrollment rates and Postsecondary education relies more on patterns persist across demographic groups. private funding in the U.S. than in most other ––The college enrollment rate of high school graduates from the developed countries. lowest family-income quintile increased from 42% in 1992 to ––In 2010, the percentage of expenditures on higher education 50% in 2002, and to 52% in 2012. The rate for middle-income coming from public as opposed to private sources ranged students increased from 53% to 55% to 65% over these from 22% in Chile and 25% in the United Kingdom, to 96% decades, while 78% of the highest-income high school in Finland and Norway. In the United States, 36% of funding graduates enrolled in college in 1992 and in 2002, and 82% was public, 48% came from households, and 16% was from enrolled in 2012 (Figure 2.1). other private sources (Figure 2.12).

6 EDUCATION PAYS 2013 Introduction

As we emerge from the Great Recession, it is increasingly clear Lives: Understanding the Issues. This study examines the that our postsecondary education system and the economic variation in postsecondary outcomes, as well as the ambiguity and social context supporting it must evolve if we are to take involved in measuring those outcomes. Education Pays includes best advantage of our human and physical resources. While some information on the variation in earnings among individuals the developing recovery has improved life for many Americans, with similar levels of education (Figure 1.5), the impact of those at the top are benefiting most. The gaps between those the length of time it takes to earn a degree (Figure 1.3), and who grow up in privilege and those who do not continue to completion rates for those who begin college (Figure 2.7); widen. Too many young people are struggling to find their however, it does not go into depth on these issues or provide places in the adult world. much insight into growing concerns about the uncertainty involved in individual decisions about postsecondary education. A college education does not carry a guarantee of a good life Taken together, the two publications should provide readers or even of financial security. But the evidence is overwhelming with a greater understanding of the importance of investments that for most people, education beyond high school is a in postsecondary education. prerequisite for a secure lifestyle and significantly improves the probabilities of employment and a stable career with a positive Not all investments in education pay off equally well. Well-designed earnings trajectory. It also provides tools that help people to live policies and strong support for individual decision-making in a healthier and more satisfying lives, to participate actively in civil complex environment have the potential to make our society society, and to create opportunities for their children. both more equitable and more productive. We should focus not only on providing more education but also on providing the The word “college” has come to mean many different things. opportunities that will best serve the varied needs, preferences, It includes universities with ivy-covered walls and small seminar and circumstances of the population. classes, offering bachelor’s and graduate degrees. But it also includes public and private for-profit institutions specializing in Like the College Board’s Trends in College Pricing and Trends short-term training for specific occupations. College students in Student Aid reports, Education Pays collects and reports may be 18-year-olds straight out of high school or they may be data. Some of the benefits of higher education documented adults seeking new labor-market skills in the middle of their in this report are widely cited; others are less well known. We work lives. bring publicly available government statistics together with less familiar academic research in order to paint a detailed THE EDUCATION PAYS REPORT and integrated picture of the benefits of higher education and how they are distributed. Where possible, we have Education Pays 2013 contains data on the financial and summarized complex analyses in a manner consistent with the nonfinancial benefits of postsecondary education, broadly straightforward presentation style of this report. We provide defined. Part 1 provides up-to-date information about earnings, references to more in-depth and sophisticated analyses so that employment and unemployment patterns, and nonwage readers can pursue issues of particular interest. attributes associated with the jobs held by people with different levels of education. Because many of the changes Education Pays is intended as a resource and a reference for that education engenders in people’s lives are outside of their anyone interested in understanding the value of investments work lives, we report on health and lifestyle patterns as well. in higher education and how different groups in society benefit from those investments. Readers will draw their own Much of the information in this report pertains to the benefits inferences about the public policies most consistent with the that accrue to society as a whole when more people are evidence provided. college-educated, including increases in tax revenues and reductions in public expenditures. Other differences associated THE PAYOFF OF HIGHER EDUCATION with postsecondary education, such as frequencies of smoking, obesity, voting, volunteering, and participating in educational The latest income data available for most of the indicators in activities with children also have a significant impact not only on Education Pays 2013 are for 2011. In the three years since we individuals, but also on the fiscal and social strength of our nation. reported on 2008 income in Education Pays 2010, the gap between the median earnings of high school graduates ages The second part of Education Pays focuses on participation and 25 to 34 and those in the same age group with a bachelor’s success rates in postsecondary education, with an emphasis degree or higher declined from 74% to 69% for men and from on differences among demographic groups. This year, we are 79% to 70% for women. The earnings gap grows as workers introducing a new companion publication, How College Shapes age and move further along their career paths, but discussions

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 7 frequently focus on recent college graduates, particularly when common, even for college graduates. But the data show large the economy is weak. The increasing number of students differences associated with level of education. Figure 1.9A who face difficulty repaying their student loans provides some shows that the unemployment rate for college graduates fell justification for this perspective. But the evidence still strongly from its peak of 4.7% in 2010 to 4.0% in 2012, but it remained supports the conclusion that the long-term benefits of investing 2 percentage points higher than the 2007 level of 2.0%. in postsecondary education exceed the costs, not just for However, the unemployment rate for high school graduates, society but also for the individual students who are bearing an which fell from its peak of 10.3% in 2010 to 8.3% in 2012, was increasing portion of the cost of their own education. almost 4 percentage points higher than its 2007 level of 4.4%.

The long-term upward trend in the earnings premium for It is important that we not allow the financial returns to college college graduates has led to a focus on that growth. But the to obscure the other benefits of a college education. Paying premium does not have to keep growing for the investment for college requires too large of an expenditure to ignore the to be a good one. According to Greenstone and Looney (2011) expected earnings on the other side, but we would lose a of the Brookings Institution’s Hamilton Project, “On average, tremendous amount as a society if each individual set as his or the benefits of a four-year college degree are equivalent to an her life goal maximizing lifetime income. College means many investment that returns 15.2 percent per year. This is more than different things to people — partly depending on the stage of double the average return to stock market investments since life at which they enroll, the type of institution they attend, the 1950, and more than five times the returns to corporate bonds, subjects they choose to study, whether they enroll full time gold, long-term government bonds, or home ownership. From or part time, and whether they are residential or commuter any investment perspective, college is a great deal.” students. But as the data in Education Pays indicate, overall behavior patterns and attitudes differ considerably by level of Our calculation in Figure 1.3 compares the median cumulative education. The knowledge, fulfillment, self-awareness, and earnings of high school graduates to those of college graduates broadening of horizons associated with education transform the and finds that by about age 36, higher earnings compensate not lives of students and of those with whom they live and work. only for four years out of the labor force, but also for average tuition and fee payments at a four-year university funded fully Postsecondary education should pay off well enough for people by student loans at 6.8% interest. The cumulative earnings of to pay back their loans and not suffer a diminished standard of associate degree recipients reach this point when graduates living. But the personal growth, increased understanding of the are about 34. Modifying the assumptions underlying these world, and wider range of options available to college-educated calculations by, for example, increasing the assumed time adults deserve our attention. Our society would become spent in school, allowing for paid work while in school, or taking immeasurably poorer if financial pressures were to lead us to grant aid into consideration will lengthen or shorten the time think of higher education as synonymous with job training. required to make up the investment. But the key point is that for the typical student, the investment pays off very well over The fact is that the typical college graduate is considerably the course of a lifetime — even considering the expense. more likely than the typical high school graduate to have a job, and that job is likely to pay significantly more than the Anecdotes about individual students whose paths through average earnings of high school graduates. The data may not postsecondary education have not worked out well do not be as colorful as the anecdotes we see so often in the press, contradict the fact that on average and for most students, but they tell a more realistic story. They also allow for a better college is an excellent financial investment. Benson, Esteva, understanding of which students and which circumstances are and Levy (2013) find that even after accounting for actual most likely to create the stories of the outliers who attract so time to degree, the probability of enrolling in college but not much attention. completing a degree, and the higher taxes paid by those with higher levels of education, the average rate of return to college COLLEGE COMPLETION remains high. They explain that this reality is not incompatible Some of the doubts about the benefits of higher education arise with the perception that more former students are facing from the fact that increasing college enrollment rates over time for difficulties repaying their loans. This issue has gained attention all demographic groups have been accompanied by persistently low because of a combination of rising tuition and debt levels with degree-completion rates. Not well known is that over three-quarters increasing variation in the earnings of college graduates. of students who begin college at age 24 or younger and enroll exclusively full time earn a degree or certificate within six years In addition to the variation in earnings characterizing the weak (Figure 2.7A). Moreover, the overall graduation rates for first-time economy in recent years, unemployment has become more full-time students are actually rising slowly.

8 EDUCATION PAYS 2013 Still, too many people begin college, invest both time and confuse the idea of increasing postsecondary participation money, and never earn a credential. The gaps in completion and attainment with the idea that almost everyone should rates by family income level, age, and enrollment intensity earn a bachelor’s degree are misleading. There are many are large. We also know that there is considerable variation postsecondary options. Students need better guidance in completion rates across types of institutions and among about which options to pursue. With that guidance, for most individual institutions with similar student bodies. Unfortunately, individuals the choice with the best long-run outcomes will these very real problems have led some observers to the involve some form of postsecondary study. unwarranted conclusion that people who do not have strong academic preparation, who do not have the required financial INTERPRETING THE EVIDENCE resources, or who are unfamiliar with the expectations and Many of the graphs in this report compare the experiences of requirements of colleges and universities should not pursue people with different education levels. In general, while simple postsecondary education. descriptions of correlations provide useful clues, they do not reliably determine causation or measure the exact size of the Research, however, tells us otherwise. Numerous economic effects. They are best interpreted as providing broadly-gauged analyses indicate that students who, because of their evidence of the powerful role that higher education plays in the demographic characteristics and academic experiences, lives of individuals and in society. That said, a growing body of hesitate to go to college stand to benefit the most from a evidence points to the direct impact of higher education not postsecondary degree (Card, 2001; Brand & Xie, 2010; Hout, only on specific job-related skills, but also on the attitudes and 2012). This finding does not imply that individuals on the margin behavior patterns of students. Education enables people to of college attendance will end up earning more than those better adapt to change. It also makes them more likely to take who knew from an early age that they would attend college. responsibility for their health and for the society in which they It means that the incremental gain in their earnings resulting live, and to parent in ways that improve the prospects for their from a college education may be larger. It is relatively rare for own children. young people whose parents are affluent — or even middle- class — college graduates to skip college altogether. For them, The evidence is overwhelming that higher education going to college and earning a bachelor’s degree is the “default improves people’s lives, makes our economy more efficient, option.” Those who choose not to enroll usually have actively and contributes to a more equitable society. As Figure 1.11 considered and rejected the idea. But for too many low-income illustrates, postsecondary education is key to the ability of adults and first-generation students, financial and logistical barriers to rise above the socioeconomic status of their parents. Without loom so large that the possibility of going to college never a college education, those born into the lower economic rungs seems realistic. Many of these students would likely benefit are likely to stay there. from appropriate postsecondary educational opportunities.

Narrowing the gaps in college participation and success across First-generation students and those from low-income income groups is vital to our future as a nation. Different paths backgrounds frequently lack the information needed to make are appropriate for different individuals, and our challenge is to the best choices when they do enroll in college. As the data make the most promising paths readily available to students in Part 2 of Education Pays reveal, many students enroll in from all backgrounds. Money alone cannot solve this problem. colleges that are less selective and less challenging than As inequality in the distribution of resources in our society those to which they would likely be admitted based on their increases over time, the hurdles facing disadvantaged children academic qualifications. Numerous studies have shown that grow in relative terms. Our education system must do better at this enrollment pattern significantly decreases the probability helping them to overcome these hurdles. of graduating.

The tables supporting all of the graphs in this report, a As Figure 2.6A indicates, over 40% of the undergraduate PDF version of the report, and a PowerPoint file containing credentials awarded in 2011-12 were certificates or associate individual slides for all of the graphs are available on our degrees. Some people who begin bachelor’s degrees and website at trends.collegeboard.org. Please feel free to cite or end up leaving school without a credential might have been reproduce the data in this report for noncommercial purposes better served by enrolling in a shorter program; on the other with proper attribution. hand, many who enroll in shorter programs diminish their chances of ever earning a four-year degree. Arguments that

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 9 Part 1: Individual and Societal Benefits of Higher Education

The benefits of investments in higher education are shared by Society as a whole also enjoys a financial return on the individual students and the societies of which they are a part. investment in higher education. In addition to widespread Individuals with college degrees, and to a lesser extent those productivity increases, the higher earnings of educated who have some college experience but do not have a degree, workers generate higher tax payments at the local, state, and earn more than others and enjoy better working conditions. federal levels. Four-year college graduates pay, on average, They contribute more to society, both through higher tax 78% more in taxes each year than high school graduates, payments and through their civic involvement. College- and for those who continued on to earn a professional educated adults also give their children benefits that increase degree, average tax payments are more than three and a the prospects that the next generation will prosper and will be half times as high as those paid by high school graduates. in a position to contribute to society in a variety of ways. Spending on social support programs such as unemployment compensation, SNAP, and Medicaid is much lower for The indicators in Part 1 of Education Pays document the individuals with higher levels of education. financial benefits of college participation and success and other ways in which higher education improves the lives of adults and While the pages in this section report relationships between their communities. education and outcomes and not measures of causation, a large body of reliable research provides evidence that Earnings are too often emphasized as the primary benefit of most of the differences in outcomes are, in fact, the result higher education, and may overshadow other outcomes that of individuals’ education. The evidence is compelling that could well be as important. Nonetheless, the price of college postsecondary education not only provides valued credentials makes an understanding of the financial benefits critical, and but also increases skills and knowledge and changes the way several of the following pages focus on earnings differences people approach their lives. corresponding to levels of educational attainment. During their working lives, college graduates earn, on average, about 65% Beyond the economic return to individuals and to society as more than high school graduates, and those with advanced a whole, higher education improves quality of life in a variety degrees earn two to three times as much as high school of ways, only some of which can be easily quantified. High graduates. The earnings premium increases as workers move levels of labor force participation, employment, and earnings further along their career paths. increase the material well-being of individuals and the wealth of society, and also carry psychological benefits. Adults Salaries are not the only form of compensation correlated with with higher levels of education are more likely to engage in education level. For example, college graduates are more likely organized volunteer work, to understand political issues, and than other employees to enjoy employer-provided health and to vote. They are also more likely to live healthy lifestyles. The pension benefits. They are more likely to feel that they learn issue is not just that they earn more and have better access new things on their jobs and are somewhat more satisfied with to health care; college-educated adults smoke less, exercise their work than others. These findings do not mean that there more, and have lower obesity rates. These differences not are no exceptions to the rule. Some individuals make fortunes only affect the lifestyles and life expectancies of individuals despite little formal education, and some struggle financially, but also reduce medical costs for society as a whole. even with a college education. As Figure 1.5 illustrates, there is Mothers with higher levels of education spend more time considerable variation in earnings among people with the same on their children’s activities. In other words, participation in level of education. But the overall patterns are clear and dramatic postsecondary education improves the quality of civil society. — more education means increased opportunities. Although it requires the considerable investment of dollars, time, and effort, The pages in this section do not provide a comprehensive higher education measurably improves the lives of most who measure of the benefits of higher education. They do, however, participate and significantly increases the probability that adults provide an indication of the nature and extent of the return on will move up in the socioeconomic hierarchy. our investment in educational opportunities.

10 EDUCATION PAYS 2013 Part 1: Individual and Societal Benefits Earnings

Education, Earnings, and Tax Payments

In 2011, median earnings of bachelor’s degree recipients with no advanced degree working full time were $21,100 higher than those of high school graduates. The difference includes $5,000 in tax payments and $16,100 in after-tax income.

––Individuals with some college but no degree earned 14% ALSO IMPORTANT: more than high school graduates working full time year-round. Their median after-tax earnings were 13% higher. ––Seventy-seven percent of four-year college graduates ages 25 and older had earnings in 2011 and 58% worked full time year-round. Fifty-nine ––Median earnings for individuals with associate degrees percent of high school graduates ages 25 and older had earnings, and working full time were 27% higher than median earnings 41% worked full time. (U.S. Census Bureau, 2012, Table PINC-03) for those with only a high school diploma. After-tax earnings ––The gap between the earnings of high school graduates and the earnings were 25% higher. of individuals whose highest degree is a bachelor’s degree is 60% for full-time workers and 73% for all earners. The corresponding difference ––Individuals with master’s degrees earned twice as much in tax payments is 77% for full-time workers and 96% for all earners. before taxes and took home 90% more than high school (U.S. Census Bureau, 2012, Table PINC-03) graduates working full time. Those with doctoral degrees ––All of the differences in earnings reported here may not be attributable working full time earned 2.6 times as much and had after-tax to education level. Educational credentials are correlated with a variety earnings 2.4 times as high school graduates. of other factors that affect earnings, including, for example, parents’ socioeconomic status and some personal characteristics. ––The median total tax payments of full-time workers with a professional degree in 2011 were over three and a half ––While the average high school graduate may not increase his or her times as high as the median tax payments of high school earnings to the level of the average college graduate simply by earning graduates working full time. After-tax earnings were about a bachelor’s degree, careful research on the subject suggests that the 2.7 times as high. figures cited here do not measurably overstate the financial return to higher education. (Carneiro, Heckman, & Vytlacil, 2003; Rouse, 2005; Harmon, Oosterbeek, & Walker, 2003)

FIGURE 1.1 Median Earnings and Tax Payments of Full-Time Year-Round Workers Ages 25 and Older, by Education Level, 2011

Taxes Paid After-Tax Earnings

Professional Degree (2%) $23,400 $78,800 $102,200

Doctoral Degree (2%) $20,300 $70,700 $91,000

Master’s Degree (10%) $14,800 $55,200 $70,000

Bachelor’s Degree (25%) $11,400 $45,100 $56,500

Associate Degree (11%) $8,600 $36,200 $44,800

Some College, Education Level No Degree (17%) $7,500 $32,900 $40,400

High School Diploma (27%) $6,400 $29,000 $35,400 $4,100 Less than a High School Diploma (7%) $21,000 $25,100 $20,500

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 Median Earnings

The bars in this graph show median earnings at each education level. The blue segments represent the estimated average federal, state, and local taxes paid at these income levels. The orange segments show after-tax earnings.

NOTE: The numbers in parentheses on the y-axis indicate the percentage of all full-time year-round workers with each education level in 2011. Taxes paid include federal income, Social Security, Medicare, state and local income, sales, and property taxes. Percentages may not sum to 100 because of rounding. SOURCES: U.S. Census Bureau, 2012, Table PINC-03; Internal Revenue Service, 2010; Davis et al., 2013; calculations by the authors.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 11 Earnings

Lifetime Earnings

During a 40-year full-time working life, the median earnings of bachelor’s degree recipients without an advanced degree are 65% higher than the median earnings of high school graduates.

––The median lifetime earnings of individuals with an associate ––While including advanced degree holders with those whose degree and those with some college education but no highest degree is a bachelor’s degree would overstate the degree (a category that includes certificate holders) are payoff of a four-year degree, excluding them understates the 27% and 13% higher than the median earnings of high payoff because part of the benefit of a bachelor’s degree is school graduates, respectively. the option it provides for obtaining a graduate degree.

––The calculations in Figure 1.2 are based on earnings of individuals working full time year-round. Because the ALSO IMPORTANT: proportion of adults working full time year-round increases ––There are a variety of ways to estimate lifetime earnings for people with education level (for example, 65% of four-year college with different levels of education. Although some reasonable graduates and 51% of high school graduates between the assumptions would lower the ratios shown here and other reasonable ages of 25 and 64 worked full time in 2011), the lifetime assumptions would increase those ratios, the results consistently earnings differentials would be larger if all adults — or all reveal significantly higher earnings levels associated with higher levels adult workers — were included in these calculations. of education. ––A number of careful studies show that people who are kept out of ––As Figure 1.1 reports, higher earnings correspond to higher tax college by barriers like a shortage of funds or the absence of nearby payments. If after-tax earnings were used to calculate lifetime appropriate colleges earn higher than average returns when the earnings, the ratio of lifetime earnings for individuals with more barriers are lowered. In other words, the idea that students who are than a high school diploma to lifetime earnings for high school not enrolling in college would be unlikely to enjoy the average benefits graduates would decline slightly. reported here is not supported by the evidence. (Brand & Xie, 2010)

FIGURE 1.2 Expected Full-Time Lifetime Earnings Relative to High School Graduates, by Education Level

3.50

2.92 3.00 2.43 2.50

1.96 2.00 1.65

1.50 1.27 1.13 Earnings Ratio 1.00 1.00 0.72

0.50

0.00 Less than a High School Some College, Associate Bachelor’s Master’s Doctoral Professional High School Diploma No Degree Degree Degree Degree Degree Degree Diploma Education Level

NOTE: Based on the sum of median 2011 earnings for full-time year-round workers at each age from 25 to 64 for each education level. No allowance is made for the shorter work life resulting from time spent in college or out of the labor force for other reasons. Future earnings are discounted at a 3% annual rate to account for the reality that because of forgone interest, dollars received in the future are not worth as much as those received today. Discounting does not have a large impact on the lifetime earnings ratios. The calculations are illustrative and do not represent what individuals will actually earn in the future. Earnings ratios calculated using data from another year will likely yield slightly different results. For example, the earnings ratio of bachelor’s degree recipients to high school graduates is 1.61 based on 2005 earnings data, 1.66 based on 2008 earnings data, and 1.65 based on 2011 earnings data. SOURCES: U.S. Census Bureau, 2012, Table PINC-03; calculations by the authors.

12 EDUCATION PAYS 2013 Part 1: Individual and Societal Benefits Earnings

Earnings Premium Relative to Price of Education

FIGURE 1.3 Compared to a high school Estimated Cumulative Full-Time Earnings (in 2011 Dollars) Net of Loan graduate, the median four-year Repayment for Tuition and Fees, by Education Level college graduate who enrolls at $1,200,000 age 18 and graduates in four years Bachelor’s Degree can expect to earn enough by age $1,000,000 36 to compensate for being out of the labor force for four years and $800,000 Associate Degree for borrowing the full tuition and fee amount without any grant aid. $600,000 High School Diploma ––For the median associate degree recipient who $400,000 borrows to cover tuition and fees at a community

Cumulative Net Earnings college and earns an associate degree two years

$200,000 after high school graduation, total earnings net of loan repayment exceed the total earnings of high school graduates by age 34. $0 18 24 30 36 42 48 54 60 64 All the break-even ages below refer to high school Age graduates as the comparison group: Orange solid line: cumulative median earnings at each age for high school graduates entering the workforce full time at age 18. Light blue solid line: 1. The lower tuition and fee level in public colleges cumulative median earnings at each age for four-year college graduates entering and universities lowers the break-even age for the workforce at age 22 after four years out of the labor force. Loan payments are bachelor’s degree recipients graduating in four subtracted from earnings for the first 10 years after graduation, covering both the years from 36 to 33. principal and 6.8% interest during and after college. Light orange dotted line: the same calculation for students borrowing to cover two years of public two-year 2. If a student stays out of the labor force and college tuition and fees and entering the workforce at age 20. borrows the full tuition and fees for five years NOTE: Based on median 2011 earnings for individuals working full time year-round at each to complete a bachelor’s degree, the break-even education level and each age. Includes only students who complete degrees; excludes bachelor’s degree recipients who earn advanced degrees. Assumes college graduates borrow age will be 37 instead of 36. Taking three years $14,352 to cover total first-year tuition and fee charges for 2011-12 (weighted average of $8,256 instead of two to complete an associate degree average public four-year in-state and $27,883 private nonprofit four-year tuition and fees) for the first year and 5% more each of the next three years. Assumes associate degree recipients raises the break-even age from 34 to 38. borrow $2,959 2011-12 average public two-year college tuition and 5% more the next year. Tuition payments and earnings are discounted at 3%, compounded every year beyond age 18. 3. If a student borrows the average tuition and In previous editions of Education Pays, this calculation was based on public four-year in-state tuition and fees, rather than a weighted average. fees net of grant aid, the break-even age for SOURCES: U.S. Census Bureau, 2012, Table PINC-03; Baum and Ma, 2012; calculations by both associate and bachelor’s degree recipients the authors. declines to 32.

4. Assuming average in-school earnings of $4,060 Break-Even Ages Under Alternative Assumptions per year for bachelor’s degree recipients lowers the break-even age from 36 to 34. The higher AA BA BA Recipient Recipient Recipient average in-school earnings ($7,060) of associate vs. vs. vs. degree recipients lowers their break-even age HS HS AA Graduate Graduate Recipient from 34 to 30. Associate and bachelor’s degree recipients’ in-school earnings are based on Baseline (as shown in Figure 1.3) 34 36 37 earnings of students who were enrolled in Alternative Assumptions 2003-04 and earned an associate degree by 2006 1. In-state tuition and fees at public four-year institutions instead of 34 33 33 and a bachelor’s degree by 2009, respectively. weighted average of public and private nonprofit four-year tuition and fees 2. Longer time to degree: 3 years out of the labor force and 3 years of 38 37 37 5. If the earnings of all working adults — instead tuition borrowed for associate degree recipients; 5 years out of the labor force and 5 years of tuition borrowed for bachelor’s degree recipients of only those working full time year-round — 3. Borrowing weighted net tuition and fees (tuition and fees minus all 32 32 32 are considered, the typical four-year college grants and tax benefits) graduate makes up for time out of the labor 4. Work average amount in college instead of no earnings 30 34 36 force and for paying tuition by age 33. 5. Based on all workers instead of just full-time year-round 30 33 35

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 13 Earnings

Earnings by Race/Ethnicity, Gender, and Education Level Median earnings for Asian men between the ages of 25 and 34 with a four-year college degree working full time year-round in 2009–2011 were 91% ($27,400) higher than median earnings for Asian men with a high school diploma. The college earnings premium for white males was 40% ($14,800).

––For women ages 25 to 34, the full time were 38% ($10,300) higher Ratio of Median Earnings of Bachelor’s earnings premium for a four-year than median earnings for white female Degree Recipients to Median Earnings of college degree ranged from 56% for high school graduates. Among bachelor’s High School Graduates, by Race/Ethnicity and Gender, Full-Time Year-Round Workers, black and white women ($14,200 degree recipients, the gender gap was 2009–2011 and $15,300, respectively) to 85% 23% ($9,800). ($22,700) for Asian women. BA/HS Earnings Ratio Ages Ages ––Among full-time workers ages 25 to 34, ALSO IMPORTANT: 25–34 25 and Older the earnings differential between those ––Figure 1.4 shows the median earnings of Asian Female 1.85 1.83 with some college but no degree and individuals working full time year-round. The Male 1.91 1.93 high school graduates ranged from 9% proportion of individuals working full time ($3,200) for white men to 27% ($8,200) Black Female 1.56 1.68 year-round increases with education level. for Asian men. For example, in 2009–2011, the proportion Male 1.67 1.56 ––The earnings differential between of the Asian female population working Hispanic Female 1.60 1.64 associate degree recipients and high full time year-round ranged from 22% for Male 1.58 1.72 those without a high school diploma to school graduates ranged from 17% White Female 1.56 1.59 ($4,300) for black women to 37% 48% for those with an advanced degree. ($10,000) for Asian women. The proportion of white men working full Male 1.40 1.61 time year-round ranged from 37% for those All Female 1.60 1.61 ––Median earnings for 25- to 34-year-old without a high school diploma to 78% for Male 1.52 1.63 white male high school graduates working those with an advanced degree.

FIGURE 1.4 Median Earnings (in 2011 Dollars) of Full-Time Year-Round Workers Ages 25–34, by Race/Ethnicity, Gender, and Education Level, 2009–2011

$100,000

Less than a High School Some College, Associate Bachelor’s Advanced High School Diploma Diploma No Degree Degree Degree Degree

$80,000 $76,200 $70,700 $68,800 $67,300 $66,300 $58,300 $60,000 $57,600 $52,500 $52,400 $52,200 $51,800 $50,800 $49,500 $48,200 $47,400 $46,100 $45,300 $42,400 $42,400 $42,100 $40,600 $40,300 $40,100 $40,000 $39,500 $39,200 $38,400 $37,200 $37,400

$40,000 $36,800 $35,500 Median Earnings $35,300 $34,000 $34,000 $33,800 $32,300 $31,600 $30,500 $30,300 $30,200 $29,900 $29,900 $29,600 $29,200 $27,900 $27,200 $27,100 $26,800 $26,300 $25,200 $25,300 $25,200 $24,400 $23,200 $22,700 $21,800 $19,300 $19,300 $20,000 $18,300

$0 Female Male Female Male Female Male Female Male Female Male Asian Black Hispanic White All

Race/Ethnicity and Gender

NOTE: Based on combined data from the 2010, 2011, and 2012 Annual Social and Economic Supplement of the Current Population Survey. Earnings in 2009 and 2010 are adjusted to 2011 dollars using the Consumer Price Index for all urban consumers. Median earnings are the median of combined data. The “Asian,” “Black,” and “White” categories include individuals who reported one race only and who reported non-Hispanic. The sample size for Asian females with less than a high school diploma is too small to allow for reliable reporting. SOURCES: U.S. Census Bureau, 2010a, 2011a, 2012a; Bureau of Labor Statistics, 2013a; calculations by the authors.

14 EDUCATION PAYS 2013 Part 1: Individual and Societal Benefits Earnings

Earnings by Gender and Education Level

Earnings of full-time year-round workers are strongly correlated with level of education, but there is considerable variation in earnings among both men and women at each level of educational attainment.

––In 2011, although 16% of male high ––In 2011, 16% of female four-year college ALSO IMPORTANT: school graduates earned as much as or graduates with no advanced degree ––Figure 1.5 includes only full-time year-round more than the median earnings of male earned less than the median earnings of workers ages 25 and older. Among both men four-year college graduates ($66,200), female high school graduates ($30,000), and women, the percentage of individuals who 84% earned less. while 84% earned more. are employed rises with level of education, as does the percentage of those employed ––In 2011, 20% of male four-year college ––In 2011, 62% of males with some who are working full time. (Bureau of Labor graduates with no advanced degree college education but no degree Statistics, 2013b) earned less than the median earnings of and 68% of males holding associate male high school graduates ($40,400), degrees earned more than the median while 80% earned more. earnings of male high school graduates.

––In 2011, although 14% of female high ––In 2011, 63% of females with some school graduates earned as much as college education but no degree and or more than the median earnings of 70% of females holding associate female four-year college graduates degrees earned more than the median ($49,100), 86% earned less. earnings of female high school graduates.

FIGURE 1.5 Median, 25th Percentile, and 75th Percentile Earnings of Full-Time Year-Round Workers Ages 25 and Older, by Gender and Education Level, 2011

$200,000 75th Percentile

Median $170,000 25th Percentile $150,000 $150,000 $141,000

$125,000 $119,500 $109,000 $100,000 $100,800 $100,000

Earnings $80,700 $83,000 $81,400 $77,500 $71,900 $69,000 $67,200 $66,200 $60,300 $71,800 $56,500 $53,400 $49,100 $50,900 $65,200 $50,000 $47,000 $47,100 $56,600 $40,500 $39,300 $53,100 $54,100 $40,200 $40,400 $34,600 $44,600 $43,900 $30,000 $27,300 $27,100 $35,100 $36,000 $31,700 $20,700 $25,200 $26,900 $27,300 $21,100 $19,900 $15,800 $0 Less than a Some College, Bachelor’s Doctoral Less than a Some College, Bachelor’s Doctoral High School No Degree Degree Degree High School No Degree Degree Degree Diploma Diploma High School Associate Master’s Professional High School Associate Master’s Professional Diploma Degree Degree Degree Diploma Degree Degree Degree Female Male Gender and Education Level

This graph shows earnings by education level separately for male and female full-time year-round workers ages 25 and older. The bottom of each bar shows the 25th percentile; 25% of the people in the group earn less than this amount. The box shows median earnings for the group. The top of the bar shows the 75th percentile; 25% of the people in the group earn more than this amount.

SOURCES: U.S. Census Bureau, 2012, Table PINC-03; U.S. Census Bureau, 2012a; calculations by the authors.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 15 Earnings

Earnings over Time by Gender and Education Level In 2011, median earnings were 70% higher for females ages 25 to 34 with a bachelor’s degree or higher working full time year-round than for those with only a high school diploma; the premium for males was 69%. These earnings gaps were higher than the gaps a decade earlier, but lower than the peaks for women in 2009 and for men in 2008.

––Between 2006 and 2011, real median earnings declined by ALSO IMPORTANT: 7% for male high school graduates and by 2% for men with ––The overall distribution of income in the United States became more bachelor’s degrees or higher. Real median earnings rose by unequal between 1971 and 2011. The share of total income received 2% for female high school graduates but declined by 2% for by households in the lowest 20% of the income distribution declined women with a bachelor’s degree or higher. from 4.1% in 1971 to 3.8% in 1991, and to 3.2% in 2011. ––Within the “Bachelor’s Degree or Higher” category, 25% ––The share of total income received by households in the highest 20% of men and 31% of women had advanced degrees in 2011, of the income distribution rose from 43.5% in 1971 to 46.5% in 1991, compared to 23% of men and 24% of women a decade earlier. and to 51.1% in 2011. ––The share of total income received by households in the top 5% of the ––The gap between median earnings for 25- to 34-year-old males income distribution rose from 16.7% in 1971 to 18.1% in 1991 and to with advanced degrees and those with only bachelor’s degrees 22.3% in 2011. (U.S. Census Bureau 2012, Historical Income Table H-2) increased from 23% in 2001 to 36% in 2011; for women the increase was from 15% to 25%.

FIGURE 1.6 Median Earnings (in 2011 Dollars) of Full-Time Year-Round Workers Ages 25–34, by Gender and Education Level, 1971–2011

$80,000 Advanced Degree

Bachelor’s Degree or Higher $60,000 Bachelor’s Degree

Associate Degree

$40,000 Some College or Associate Degree

Some College $20,000 High School

Median Earnings in 2011 Dollars Diploma

$0 Grades 9−11 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011

Female Male Gender and Year

Percentage of “Bachelor’s Degree or Higher” Category with Advanced Degrees (Master’s, Doctoral, or Professional) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Female 20% 19% 20% 21% 21% 21% 22% 24% 23% 22% 24% 26% 27% 27% 27% 28% 31% 30% 28% 32% 31% Male 25% 24% 23% 23% 25% 22% 22% 22% 22% 21% 23% 24% 25% 25% 25% 25% 24% 28% 27% 24% 25%

SOURCES: Data for 1993 and prior: National Center for Education Statistics (NCES), 2004a; Data for 1994 and after: U.S. Census Bureau, 1995–2012, PINC tables; CPI-U: Bureau of Labor Statistics, 2013a; calculations by the authors.

16 EDUCATION PAYS 2013 Part 1: Individual and Societal Benefits Earnings

Earnings Paths

Earnings peak at ages 45–49 or 50–54 for workers at all levels of education. The increase in earnings from ages 25–29 to the peak is largest for four-year college graduates.

––For full-time year-round workers, median earnings of 45- to ––The earnings gap between high school graduates and 49-year-olds with high school diplomas are 33% higher than bachelor’s degree holders ages 25 to 29 increases from 54% those of 25- to 29-year-olds. The difference is 60% for four-year ($15,200) to 72% ($15,500) when part-time workers are college graduates and larger for those with advanced degrees. included. For those ages 45 to 49, the earnings premium for four-year college graduates working full time is 86% ($32,000) ––The earnings gap between high school graduates and individuals and for all workers it is 87% ($26,700). with higher levels of education is smallest for 25- to 29-year-olds. For example: ALSO IMPORTANT: ƒƒFor full-time workers with associate degrees, the earnings Percentage of All Workers Working Full-Time Year-Round, by Age and gap grows from 25% ($7,000) for 25- to 29-year-olds to 34% Education Level, 2009–2011 ($12,500) for 45- to 49-year-olds and to 36% ($12,800) for Less 60- to 64-year-olds. than a Some High High College, Profes- ƒƒFor full-time workers whose highest degree is a bachelor’s School School No Associate Bachelor’s Master’s Doctoral sional degree, the earnings gap grows from 54% ($15,200) for Age Diploma Diploma Degree Degree Degree Degree Degree Degree 25- to 29-year-olds to 86% ($32,000) for 45- to 49-year-olds 25 to 29 49% 60% 59% 65% 71% 68% 65% 68% and is 74% ($26,500) for 60- to 64-year-olds. 45 to 49 60% 70% 72% 73% 76% 78% 80% 84% 60 to 64 56% 61% 62% 63% 64% 60% 70% 71% SOURCES: U.S. Census Bureau, 2012f; calculations by the authors.

FIGURE 1.7A FIGURE 1.7B Median Earnings of Full-Time Year-Round Workers by Age and Median Earnings of All Workers by Age and Education Level, Education Level, 2009–2011 2009–2011

$140,000 Professional Degree $140,000 Doctoral Degree $120,000 Master’s Degree $120,000 $100,000 Bachelor’s Degree $100,000

$80,000 Associate Degree $80,000 Some College, $60,000 No Degree $60,000 High School Median Earnings

$40,000 Diploma Median Earnings $40,000 Less than a $20,000 High School $20,000 Diploma $0 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 $0 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 Age Age

Full-Time Year-Round Workers All Workers Less than Some Less than Some a High High College, Profes- a High High College, Profes- School School No Associate Bachelor’s Master’s Doctoral sional School School No Associate Bachelor’s Master’s Doctoral sional Age Diploma Diploma Degree Degree Degree Degree Degree Degree Diploma Diploma Degree Degree Degree Degree Degree Degree 25 to 29 $22,000 $27,900 $31,100 $34,900 $43,100 $50,000 $59,400 $56,200 $16,000 $21,600 $23,900 $28,700 $37,100 $42,400 $48,900 $48,600 45 to 49 $26,900 $37,100 $44,300 $49,600 $69,100 $81,300 $100,000 $122,400 $21,200 $30,800 $36,700 $41,500 $57,500 $72,000 $92,300 $103,900 60 to 64 $27,300 $35,600 $43,100 $48,400 $62,100 $74,200 $100,900 $120,500 $20,100 $26,800 $32,500 $37,000 $47,000 $57,000 $84,300 $100,600

NOTE: Based on the 2009–2011 American Community Survey three-year combined data file. Earnings in 2009 and 2010 are adjusted to 2011 dollars using the Consumer Price Index for all urban consumers. Median earnings are the median of combined data. SOURCES: U.S. Census Bureau, 2012f; calculations by the authors.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 17 Other Economic Benefits

Employment

FIGURE 1.8A In 2012, among adults between Civilian Population Ages 25 to 64: Number (in Millions) and Percentage the ages of 25 and 64, 67% of high Employed, Unemployed, and Not in the Labor Force, 2002, 2007, and 2012 school graduates, 71% of those with Employed Unemployed Not in the Labor Force some college but no degree, 77% of 3% those with associate degrees, and 2012 82% 15% 53.3 2% 82% of those with four-year college 2007 84% 14% 49.3 3% degrees were employed.

Bachelor ´ s 2002 84% 14% 43.2

Degree or Higher ––For all groups without any postsecondary 5% degrees, the percentages employed were 6 2012 77% 18% 17.2 points lower in 2012 than they had been in 2007. 3% 16% 2007 81% 15.0 The percentage employed for associate degree holders was 4 percentage points lower in 2012 Degree 3% 16% Associate 2002 81% 13.5 than in 2007. For those with a bachelor’s degree or higher, the decline was 2 percentage points. 6% 2012 71% 23% 28.0 ––The number of employed four-year college 3% graduates between the ages of 25 and 64 2007 77% 20% 27.6 4% increased from 36.2 million in 2002 to 41.4

No Degree 2002 77% 19% 26.3 million in 2007 and to 43.5 million in 2012. Some College,

Education Level and Year Education Level and Year ––Among both associate degree holders and those 2012 67% 6% 26% 47.0 with at least a bachelor’s degree, the number of 3% employed adults between the ages of 25 and 2007 73% 24% 47.9 64 increased between 2007 and 2012, while 4% Diploma employment declined for other groups.

High School 2002 73% 22% 46.7 ––The overall educational attainment in the 8% population increased between 2002 and 2012. 2012 53% 39% 17.2 5% For example, the total number of adults between 2007 59% 36% 18.3 the ages of 25 and 64 without a high school 6% diploma declined by 1.4 million during this 2002 58% 37% 18.6 School Diploma Less than a High time period, while the number with at least a 0 10 20 30 40 50 60 bachelor’s degree grew by 10.1 million. Number of Individuals (Millions) ––In 2012, 18% of individuals ages 65 and older NOTE: To be considered a member of the labor force, individuals must either be employed or were in the labor force, ranging from 10% of be actively seeking employment. Percentages may not sum to 100 because of rounding. those without a high school diploma to 28% SOURCES: U.S. Census Bureau, 2002b, 2007a, and 2012b; calculations by the authors. of those with at least a bachelor’s degree. In contrast, 77% of individuals ages 25 to 64 were in the labor force, ranging from 61% of those FIGURE 1.8B without a high school diploma to 85% for those Labor Force Participation Rates by Age and Education Level, 2012 with at least a bachelor’s degree.

Less than a High School Some College, Associate Bachelor’s HS Diploma Diploma No Degree Degree Degree or Higher 100% Labor Force Participation Rates by Age and Education 85% 82% Level, 2012 77% 76% 80% 74% 73% Less than Some 66% a High High College, Bachelor’s 61% 59% 60% School School No Associate Degree or Age Diploma Diploma Degree Degree Higher Total 46% 25 to 34 68% 79% 80% 86% 88% 82% 40% 28% 35 to 44 69% 80% 82% 87% 88% 83% 20% 22% 20% 15% 45 to 54 63% 77% 80% 85% 88% 80% 10% Labor Force Participation Rate 55 to 64 43% 60% 65% 69% 75% 65% 0% 25 to 64 65 and Older 25 and Older Age and Education Level SOURCES: U.S. Census Bureau, 2012b; calculations by the authors.

18 EDUCATION PAYS 2013 Part 1: Individual and Societal Benefits Other Economic Benefits

Unemployment

The unemployment rate for individuals with at least a bachelor’s degree has consistently been about half the unemployment rate for high school graduates.

––The 4.0% 2012 unemployment rate for individuals ages 25 and ––Over the 20 years from 1992 to 2012, the largest gaps between older with at least a bachelor’s degree represented a decline the unemployment rates for four-year college graduates and from the 4.7% peak for this group in 2010. For associate high school graduates were 5.6 percentage points in 2010 and degree holders, the decline was from 7.0% to 6.2% and for 5.1 points in 2009 and 2011. The smallest gaps were 1.7 to 1.9 those with some college but no degree, the unemployment percentage points from 1999 through 2001. rate fell from 9.2% in 2010 to 7.7% in 2012. ––From 1992 through 2012, the difference between the annual ––The 8.3% 2012 unemployment rate for individuals ages 25 and unemployment rate for individuals with some college but no older with high school diplomas represented a decline from the degree and high school graduates ranged from 0.3 percentage 10.3% peak for this group in 2010. For those who are not high points in 2003 to 1.1 percentage points in 2010. school graduates, the decline was from 14.9% to 12.4%.

FIGURE 1.9A Unemployment Rates Among Individuals Ages 25 and Older, by Education Level, 1992–2012

16% Less than a High School Diploma High School Diploma 14% Some College, No Degree Associate Degree 12% Bachelor’s Degree or Higher

10%

8%

6% Unemployment Rate 4%

2%

0% 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Year

Unemployment Rates Among Individuals Ages 25 and Older, by Education Level, 1992–2012, Selected Years

Unemployment Rate Less than a Some College, Bachelor’s Degree BA/HS Year High School Diploma High School Diploma No Degree Associate Degree or Higher Unemployment Rate Ratio 1992 11.5% 6.8% 6.0% 4.8% 3.2% 0.46 1997 8.1% 4.3% 3.5% 2.7% 2.0% 0.47 2002 8.4% 5.3% 4.8% 4.0% 2.9% 0.55 2007 7.1% 4.4% 3.8% 3.0% 2.0% 0.46 2010 14.9% 10.3% 9.2% 7.0% 4.7% 0.46 2012 12.4% 8.3% 7.7% 6.2% 4.0% 0.48

SOURCE: Bureau of Labor Statistics, 2013b.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 19 Other Economic Benefits

Unemployment

FIGURE 1.9B In 2012, when the unemployment Unemployment Rates of Individuals Ages 25 and Older, by Age and rate for 25- to 34-year-olds with Education Level, 2012 four-year college degrees was 4.1%, 11.2% of high school graduates in Less than a High School Some College, Associate Bachelor’s High School Diploma No Degree Degree Degree or Higher this age range were unemployed. Diploma

25% ––The 2012 unemployment rates for 25- to 34-year-olds were 9.6% for those with some college but no degree and 7.2% for those with 20% associate degrees.

––In 2012, the unemployment rate for 25- to 15% 34-year-old four-year college graduates was slightly higher than the 3.9% rate for those ages 10% 45 to 54. However, the unemployment rate for 25- to 34-year-old high school graduates was Unemployment Rate

15.4% 11.2%, much higher than the 7.4% rate for those 11.9% 5% 12.1% 10.6% 11.2% ages 45 to 54. 9.6% 8.7% 7.7% 7.4% 7.2% 6.6% 6.3% 6.5% 5.9% 6.0% 5.3% 4.5% 4.1% 3.9% 3.4% ––The gaps in unemployment rates by education 0% 25 to 34 35 to 44 45 to 54 55 to 64 level were narrower for Asians than for other Age and Education Level groups. The 2012 unemployment rate for Asian bachelor’s degree recipients was 70% of that for high school graduates, compared to 47% SOURCES: U.S. Census Bureau, 2012b; calculations by the authors. for blacks and Hispanics and 49% for whites.

––The 6.3% unemployment rate for black four-year college graduates in 2012 was about 70% higher than the 3.7% unemployment FIGURE 1.9C rate for white four-year college graduates. Unemployment Rates of Individuals Ages 25 and Older, by Race/Ethnicity The 13.4% unemployment rate for black high and Education Level, 2012 school graduates was 79% higher than the 7.5% unemployment rate for white high Less than a High School Some College, Associate Bachelor’s school graduates. High School Diploma No Degree Degree Degree or Higher Diploma ––The 7.1 percentage point gap between the 25% unemployment rates for blacks with at least a bachelor’s degree and black high school graduates is larger than the differences within 20% other racial/ethnic groups, which range from 1.8 percentage points for Asians to 3.9 percentage 15% points for Hispanics.

10% Labor Force Participation Rates of Individuals Ages 25 and Older, by Race/Ethnicity and Education Level, 2012 Unemployment Rate

20.4% Less than Some 5% a High High College, Bachelor’s 13.4%

11.6% School School No Associate Degree or 11.0% 11.4% 10.2% 9.0% 8.0% 8.0% 6.8% 7.5% 7.0% 6.3% 6.3% Diploma Diploma Degree Degree Higher 6.9% 6.1% 5.1% 5.4% 4.3% 3.7% 0% Asian 44% 60% 69% 72% 76% Asian Black Hispanic White Black 37% 62% 69% 75% 79% Race/Ethnicity and Education Level Hispanic 61% 71% 76% 79% 80% White 47% 59% 65% 73% 76% SOURCES: Bureau of Labor Statistics, 2013b; calculations by the authors. SOURCES: Bureau of Labor Statistics, 2013b; calculations by the authors.

20 EDUCATION PAYS 2013 Part 1: Individual and Societal Benefits Other Economic Benefits

Job Satisfaction

FIGURE 1.10A Among workers ages 30 to 45 Sense of Learning New Things on the Job Among Employed Individuals with a bachelor’s degree or higher, Ages 30 to 45, by Education Level, 2002, 2006, and 2010 56% strongly agree that their jobs require them to keep learning 100% 94% new things. Among those with 89% 81% 81% some college or an associate 80% Agree 44% 38% degree, 44% strongly agree with Strongly Agree 60% 46% 48% this statement, compared to just

40% over 30% of those with a high 44% 56% school diploma. 20% 35% 32% Percentage of Individuals ––The percentage of workers ages 30 to 45 who 0% Less than a High Some College or Bachelor’s report being very satisfied with their work ranges High School School Associate Degree or from 42% of those with less than a high school Diploma Diploma Degree Higher diploma and 47% of those with a high school Education Level diploma to 51% of those with a bachelor’s degree or higher.

––Differences in the percentage of workers who report being at least moderately satisfied with their work are smaller, ranging from 83% of those with less than a high school diploma to 89% of those FIGURE 1.10B with a bachelor’s degree or higher. Work Satisfaction Rates Among Employed Individuals Ages 30 to 45, by Education Level, 1972–2012 ALSO IMPORTANT:

––Over the 40 years from 1972 to 2012, 44% of employed 100% 88% 87% 89% individuals ages 30 to 45 who report being very 83% satisfied with their jobs also report being very happy, 80% Moderately Satis ed while 24% of those who report being moderately 40% 41% 39% 38% 60% Very Satis ed satisfied with their jobs and 17% of those who report being dissatisfied with their jobs report being very 40% happy. (National Opinion Research Center, 2013; 42% 47% 48% 51% calculations by the authors) 20%

Percentage of Individuals ––Many factors determine job satisfaction. They include 0% demographic factors, job characteristics, and earnings. Less than a High Some College or Bachelor’s High School School Associate Degree or ––Controlling for many individual demographic Diploma Diploma Degree Higher characteristics and income, education still has a Education Level significant and positive effect on job satisfaction. (Oreopoulos & Salvanes, 2011)

NOTE: Based on the General Social Survey 1972–2012 cumulative data file with combined data from each survey year. Includes individuals ages 30 to 45 who were working full time or part time at the time of the survey. Figure 1.10A reports on the percentage of individuals who agreed with the following statement: “My job requires that I keep learning new things” (available in survey years 2002, 2006, and 2010) and Figure 1.10B reports on responses to the following question: “On the whole, how satisfied are you with the work you do?” (available in most years from 1972 to 2012). Components may not sum to totals because of rounding. SOURCE: National Opinion Research Center, 2013.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 21 Other Economic Benefits

Social Mobility

FIGURE 1.11 Of adults who grew up in the middle Family Income Quintiles of Adult Children, by Education and Parents’ Family family income quintile, 31% of those Income Quintile, 2000 to 2008 with a four-year college degree Non-College Graduate Adult Children moved up to the top income quintile Lowest Second Third Fourth Highest between 2000 and 2008, compared with just 12% of those without a Top 13% 16% 22% 24% 25% four-year college degree.

Fourth 12% 26% 22% 22% 18% ––Of adults who grew up in the bottom family income quintile, 47% of those without a

Third 17% 22% 25% 23% 12% bachelor’s degree remained in the bottom quintile, compared to 10% of those with a four‑year college degree. Three percent of those Second 28% 24% 20% 18% 9% without a bachelor’s degree had moved up to the Parents’ Income Quintile top quintile, compared to 10% of those with a 3% four-year college degree. Bottom 47% 26% 16% 8% ––Of adults who grew up in the top family income 0% 20% 40% 60% 80% 100% quintile, 51% of those with a bachelor’s degree Percentage of Adult Children remained in the top quintile, compared with 25% of those without a four-year college degree. Four Four-Year College Graduate Adult Children percent of those with a bachelor’s degree had moved down to the bottom quintile, compared with Lowest Second Third Fourth Highest 13% of those without a four-year college degree.

Top 4% 5% 16% 23% 51% ALSO IMPORTANT:

Fourth 5% 10% 23% 27% 35% ––There is geographic variation in upward mobility within the United States, with less mobility in metropolitan areas in the Southeast and industrial Third 7% 15% 21% 26% 31% Midwest and the highest mobility in metropolitan areas in the Northeast, Great Plains and West. Second 12% 14% 10% 27% 37% (Chetty, Hendren, Kline, & Saez, 2013) Parents’ Income Quintile ––There is less economic mobility across generations in the United States than in other developed countries Bottom 10% 37% 26% 17% 10% such as the U.K., France, Germany, Sweden, Italy, 0% 20% 40% 60% 80% 100% Australia, Finland, Denmark, and Canada. (Pew Charitable Trusts, 2011) Percentage of Adult Children ––The high level of economic inequality in the United States is widely viewed as an important explanation for Family Income Quintiles of Adult Children, by Parents’ Family Income Quintile the relatively low level of social mobility in this country. Family Income Quintile of Adult Children Other explanations include inequality in childhood Parents’ Income Quintile Lowest Second Third Fourth Highest educational opportunities and disparities in the resources parents at different levels of the income distribution Top 8% 10% 19% 23% 40% devote to enrichment activities for their children. Fourth 9% 20% 23% 24% 24% (Krueger, 2012; Corak, 2013; Greenstone et al., 2013) Third 14% 20% 23% 24% 19% ––Over the past four decades, high-income families Second 25% 24% 18% 20% 14% have gone from spending slightly more than four Bottom 43% 27% 17% 9% 4% times as much as low-income families on education NOTE: “Family income” includes all taxable income (such as earnings, interest, and dividends) and enrichment activities for their children to spending and cash transfers (such as Social Security and welfare) of all family members and has been nearly seven times as much. (Duncan & Murnane, 2011) adjusted for family size and inflation. “Income for parents” is computed as the mean value of total family income taken as reported in the Panel Study of Income Dynamics (PSID), 1967 through 1971. “Income for children” is computed as the mean value of total family income taken as reported in the PSID for the years 2000, 2002, 2004, 2006, and 2008. Percentages may not sum to 100 because of rounding. SOURCE: Pew Charitable Trusts, 2012, Figures 3 and 18.

22 EDUCATION PAYS 2013 Part 1: Individual and Societal Benefits Other Economic Benefits

Pension Plans

College-educated workers are more likely than others to be offered pension plans by their employers. Among those to whom these plans are available, participation rates are higher for individuals with higher education levels.

––Employer-provided pension coverage has declined FIGURE 1.12A Employer-Provided Pension Plan Coverage Among Full-Time Year-Round over the past 20 years, with the most rapid Workers Ages 25 and Older, by Education Level, 1991, 2001, and 2011 declines occurring in the most recent decade and for workers without a college education, 1991 2001 2011 particularly those without a high school diploma.

100% ––The percentage of high school graduates 78% 79% 80% 74% 73% working full time year-round who were offered 70% 72% 66% 66% 68% 65% pension coverage was 60% in 1991 and 2001, 60%60% 59% 63% 60% 52% but had declined to 52% by 2011. The percentage 43% 38% of full-time workers with a bachelor’s degree 40% 29% who were offered pension plans was 72% in 1991, 74% in 2001, and 65% in 2011.

Percentage Offered 20% The coverage rate for those with advanced 0% degrees was 78% in 1991, 79% in 2001, Less than a High School Some College, Associate Bachelor’s Advanced and 73% in 2011. High School Diploma No Degree Degree Degree Degree Diploma Education Level and Year ––In 2011, the percentage of full-time workers offered pension plans by their employers who SOURCES: U.S. Census Bureau, 1992, 2002a, and 2012a; calculations by the authors. chose to participate ranged from 77% for those without a high school diploma to 94% for those with an advanced degree.

ALSO IMPORTANT: FIGURE 1.12B Participation Rates in Employer-Provided Pension Plans Among Eligible Full- ––In 2011, the percentage of part-time workers (those Time Year-Round Workers Ages 25 and Older, by Education Level, 2011 who worked at least 20 hours a week for at least 26 weeks but less than full time year-round) offered pension plans ranged from 20% for those without a high school 100% diploma and 33% for high school graduates to 46% for bachelor’s degree recipients and 58% for those 80% with an advanced degree. (U.S. Census Bureau, 2012a; calculations by the authors.) 60% ––In 2010, 68% of private sector employees with pension 40% 77% 86% 88% 89% 92% 94% plans had access only to defined contribution plans, in which the payout depends on the amount accumulated 20% in a personal account. Over time, these plans have Percentage Participating become more common than defined benefit plans, 0% Less than a High School Some College, Associate Bachelor’s Advanced which provide a predetermined income level each year High School Diploma No Degree Degree Degree Degree after retirement. (U.S. Census Bureau, 2012d, Table 655) Diploma Education Level ––Low earnings levels, which are more common among individuals with lower education levels, may explain SOURCES: U.S. Census Bureau, 2012a; calculations by the authors. some decisions not to participate in employer-provided pension plans that require workers to contribute a portion of their wages.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 23 Other Economic Benefits

Health Insurance

FIGURE 1.13A Among both full-time and part-time Employer-Provided Health Insurance Coverage Among Full-Time Year-Round workers, those with higher levels Workers Ages 25 and Older, by Education Level, 1991, 2001, and 2011 of educational attainment are more likely than others to be covered by employer-provided health insurance. 1991 2001 2011 100% ––Between 1991 and 2011, health insurance coverage 83% declined by 15% (10 percentage points) for high 80% 75% 74% 76% 69% 71% 69% 69% 73% school graduates working full time year-round. The 65% 66% 64% 62% 60% coverage rate declined from 65% in 1991 to 62% in 60% 55% 52% 2001 and to 55% in 2011. 45% 40% 34% ––Between 1991 and 2011, health insurance coverage

Percentage Covered 20% declined by 8% (6 percentage points) for four-year college graduates without advanced degrees 0% working full time year-round. The coverage rate Less than a High School Some College, Associate Bachelor’s Advanced High School Diploma No Degree Degree Degree Degree declined from 75% in 1991 to 74% in 2001 and to Diploma 69% in 2011. Education Level and Year ––In 1991, 61% of advanced degree holders, 45% of bachelor’s degree holders, and 36% of high school graduates working part time were covered by employer-provided health insurance. By 2011, FIGURE 1.13B those percentages had declined to 48%, 39%, Employer-Provided Health Insurance Coverage Among Part-Time Workers and 27%, respectively. Ages 25 and Older, by Education Level, 1991, 2001, and 2011

ALSO IMPORTANT:

1991 2001 2011 ––In 2011, hospitals in the U.S. provided about $41.1 billion 100% in care for which they were not compensated. This cost fell indirectly on federal and state governments and 80% insured patients. (American Hospital Association, 2012)

61% 60% 57% ––In 2011, when 18% of adults ages 18 and older were 49% 48% not covered by health insurance at any time during the 43% 45% 38% 39% 39% year, only 9% of those with a bachelor’s degree or higher 40% 36% 35% 34% 32% 27% 30% were not covered. This was the case for 15% of those 25% 22%

Percentage Covered 20% 16% with associate degrees, 18% of those with some college but no degree, and 21% of high school graduates. (U.S. 0% Census Bureau, 2012h, Table HI01) Less than a High School Some College, Associate Bachelor’s Advanced High School Diploma No Degree Degree Degree Degree ––In 2011, when 30% of adults ages 18 and older were Diploma Education Level and Year covered by government health care plans, 20% of adults with a bachelor’s degree or higher, 25% of those with an associate degree, 27% of those with some college NOTE: Part-time workers are those who worked at least 20 hours a week for at least 26 weeks during the year, but did not work full time year-round. but no degree, and 36% of high school graduates had SOURCES: U.S. Census Bureau, 1992, 2002a, and 2012a; calculations by the authors. government coverage. (U.S. Census Bureau, 2012h, Table HI01)

24 EDUCATION PAYS 2013 Part 1: Individual and Societal Benefits Other Economic Benefits

Poverty

The 5% poverty rate in 2011 for bachelor’s degree recipients was about one-third of the 14% poverty rate for high school graduates.

––Individuals living in households headed by FIGURE 1.14A Percentage of Individuals Ages 25 and Older Living in Households in Poverty, unmarried females with children under 18 by Household Type and Education Level, 2011 have particularly high poverty rates. This family structure accounts for 6% to 9% of households Less than a High School Some College, Associate Bachelor’s headed by individuals with less than a four-year High School Diploma No Degree Degree Degree or Higher college degree, but only 3% of households Diploma headed by four-year college graduates. (Not 100% shown in graph; U.S. Census Bureau, 2012a; calculations by the authors.) 80% ––The 12% poverty rate for bachelor’s degree 58% 60% recipients living in families headed by unmarried 40% females in 2011 was two and a half times as 40% 33% 29% 28% high as the overall poverty rate for those with a 24% 20% 14% bachelor’s degree or higher, but was less than

Percentage in Poverty 12% 11% 11% 7% 8% 4% 2% 5% a third of the 40% poverty rate for high school 0% graduates living in similar families. Female Householders with Married Couples with All Households Related Children Related Children Under 18 (6%) Under 18 (25%) ––The 2011 poverty rate for all associate degree Household Type and Education Level recipients was 8%, compared to 11% for individuals with some college but no degree NOTE: The numbers in parentheses on the x-axis represent each household type as a percentage and 14% for high school graduates with no of all households. college experience. SOURCES: U.S. Census Bureau, 2012a; calculations by the authors. ––In 2011, the percentage of all children under age FIGURE 1.14B 18 who lived with both parents increased with Living Arrangements of Children Under 18 Years of Age, by Poverty Status the highest education level of either parent. and Highest Education of Either Parent, 2011

Living with Living with Living with Fathers Only ALSO IMPORTANT: Both Parents Mothers Only or Other Living Arrangements ––The official poverty threshold varies with family size, number of children under 18, and senior citizen All Children 69% 24% 7% status. In 2011, a family of four with two children was considered poor if it had an income below $22,811. Below 100% of Poverty 42% 47% 11% The poverty threshold was $11,702 for a single person under age 65 and $18,123 for a family of three with two

Status 100% of Poverty Poverty and Above 77% 17% 6% children. (U.S. Census Bureau, 2011e) ––The poverty threshold is the official measure of poverty Less than a High and is slightly different from the poverty guidelines School Diploma 53% 31% 16% used to determine eligibility for public programs. In High School Diploma 59% 26% 14% 2011, the poverty guideline for families of four issued by the Department of Health and Human Services Some College or 67% 23% 10% was $22,350. (U.S. Department of Health and Human Associate Degree 5% Services, 2011)

of Either Parent Bachelor’s Degree 86% 9% Highest Education Poverty Status and Parents ’ Education Level 5% 3% Advanced Degree 92% 0% 20% 40% 60% 80% 100% Percentage of Children Under 18

SOURCE: U.S. Census Bureau, 2011d, Table C-3.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 25 Other Economic Benefits

Public Assistance Programs

In 2011, the percentages of high school graduates ages 25 and older living in households receiving benefits from SNAP (the Supplemental Nutrition Assistance Program — formerly known as Food Stamps) and from the free and reduced-price school lunch program were about six times as high as the percentages of those with a bachelor’s degree or higher participating in these programs.

––In 2011, about a quarter of adult high ALSO IMPORTANT: reduced-price school lunches, at a total cost school graduates and 43% of those of $8.3 billion to the federal government. In without a high school diploma lived ––Medicaid provides health insurance to 2006, 57.8 million participants received a total many low-income families and other eligible in households that received Medicaid of $269.9 billion in Medicaid benefits. (U.S. individuals. The National School Lunch coverage. Participation rates were 19% Census Bureau, 2010c, Tables 144 and 558) for those with some college but no Program provides free or reduced-price degree, 17% for those with an associate lunches to eligible school children. SNAP ––A 2009 study from the RAND Corporation degree, and 9% for those with at least a subsidizes food purchases for eligible estimated that the discounted lifetime four-year college degree. low-income households. savings to taxpayers from reduced spending on social programs resulting from the ––The participation rates for Medicaid, SNAP, increase from a high school diploma to and the school lunch program were higher in some college ranged from $9,000 per white 2011 than in 2008 and 2005, with the largest man to $22,000 per black woman (in 2002 increases seen in adults without a high school dollars). Estimated reductions resulting diploma and the smallest increases seen in from the increase from some college to a those with a four-year college degree. (Baum bachelor’s degree range from $9,000 per & Ma, 2007; Baum, Ma, & Payea, 2010) white man to $32,000 per black woman. ––In 2008, 28.4 million participants received an (Carroll & Erkut, 2009, Tables 7.3 and 7.4) annual average of $1,218 in SNAP benefits. Thirty-one million children received free or

FIGURE 1.15 Percentage of Individuals Ages 25 and Older Living in Households Participating in Selected Public Assistance Programs, by Education Level, 2011

Less than a High School Diploma Some College, Associate Degree Bachelor’s Degree High School Diploma No Degree or Higher

50% 43% 40%

30% 24% 22% 24% 19% 20% 17% 12% 11% 9% 10% 10% 9% 7% 7%

Percentage Participating 2% 2% 0% Medicaid School Lunch SNAP Public Assistance Program

SOURCES: U.S. Census Bureau, 2012a; calculations by the authors.

26 EDUCATION PAYS 2013 Part 1: Individual and Societal Benefits Health Benefits

Smoking

Smoking rates among college graduates have been significantly lower than smoking rates among other adults since information about the risks of smoking became public.

FIGURE 1.16A ––Smoking rates in the United States increased in Smoking Rates Among Individuals Ages 25 and Older, by Education Level, the 1940s, peaked at 46% in 1957, and began a 1940–2012 steady decline in the 1960s.

Less than a High School Diploma ––College graduates were at least as likely as others High School Diploma to smoke before the medical consensus on the Some College or Associate Degree dangers of smoking became clear. By 1970, when 60% Bachelor’s Degree or Higher information was widespread and clear public warnings were mandatory, the smoking rate 40% among college graduates had declined to 37%, while 44% of high school graduates smoked. This gap increased to 13 points in 1982, to 16 points in 20% 1992, and to 17 points in 2012. Smoking Rate

––In 2012, only 8% of individuals with at least a 0% bachelor’s degree smoked, compared to 20% of 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2012 those with some college or an associate degree Year and 25% of high school graduates and of those NOTE: Data for 2001 through 2005 are three-year moving averages. without a high school diploma. SOURCES: de Walque, 2004; National Center for Health Statistics, 2002–2013; calculations by the authors. ––Among smokers with at least some college experience, almost half attempted to stop smoking in 2012. Among those with high school FIGURE 1.16B diplomas, 11% out of the 25% who smoked Distribution of Smoking Histories Among Individuals Ages 25 and Older, by tried to quit. Education Level, 2012

Current Smoker Who Did Not Try to Quit in the Past 12 Months Current Smoker Who Tried to Quit in the Past 12 Months ALSO IMPORTANT: Former Smoker ––Statistical analysis suggests that higher levels of Never Smoked 3% 100% education are not just correlated with lower smoking 4% 11% 9% 14% 14% 5% rates, but also cause declines in smoking. (de Walque, 3% 9% 2004; Grimard & Parent, 2007) 10% 22% 80% 10% 11% 23% ––In their analysis of the positive relationship between 25% education and health outcomes, much of which 22% 26% 27% is explained by differences in behaviors, Cutler 60% and Lleras-Muney (2010) find that income, health insurance, and family background account for about

40% 30% of the differences, but knowledge and measures of cognitive ability explain an additional 30%, with 53% 49% 52% 57% 68% 72% social networks explaining another 10% of the Percentage of Individuals 20% differences. The authors argue that “more important than specific knowledge is how one thinks.” They find that much of the difference seems to be driven by 0% the fact that education raises cognition, which in turn Less than a High School Some College, Associate Bachelor’s Advanced improves behavior. High School Diploma No Degree Degree Degree Degree Diploma Education Level

NOTE: Percentages may not sum to 100 because of rounding. SOURCES: National Center for Health Statistics, 2013; calculations by the authors.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 27 Health Benefits

Exercise

FIGURE 1.17A Among young adults between Exercise Rates Among Individuals Ages 25 and Older, by Age and Education the ages of 25 and 34, 68% of Level, 2012 Vigorous Light/Moderate four-year college graduates and Less than a High School Diploma 40% of high school graduates High School Diploma Some College, No Degree reported exercising vigorously Associate Degree Bachelor’s Degree or Higher at least once a week in 2012; 17% of four-year college graduates 39% 19% 40% 20% and 20% of high school graduates 53% 18% reported light or moderate exercise.

25 to 34 56% 20% 68% 17% ––Among 55- to 64-year-olds, 52% of high school graduates reported some exercise and 25% 28% 23% 40% 20% reported exercising vigorously; 80% of four-year 50% 20% college graduates reported some exercise and

35 to 44 54% 20% 53% reported vigorous exercise. 65% 19% ––In 2011, 63% of four-year college graduates and 23% 22% 38% of high school graduates reported meeting 33% 25% the federal guidelines for physical activity of at 42% 23% least 2½ hours a week of moderate or 1¼ hours 45 to 54 44% 28% of intensive aerobic activity. 59% 24%

Age and Education Level 18% 22% 25% 27% ALSO IMPORTANT: 34% 32% ––Numerous studies investigating the relationship

55 to 64 38% 29% between education and health support the idea that 53% 27% the skills, attitudes, and thought patterns fostered

12% 26% by education lead to more responsible health-related 17% 33% behaviors. (Mirowsky & Ross, 2003) 25% 32% ––Improvements in health are associated with each 24% 36% additional year of schooling, but in contrast to the 65 and older 39% 33% relationship between education and wages, there 0% 20% 40% 60% 80% 100% does not appear to be a “sheepskin” effect with the completion of a degree having a bigger impact than Percentage of Individuals just the completion of an additional year of education. SOURCES: National Center for Health Statistics, 2013; calculations by the authors. (Cutler & Lleras-Muney, 2006) ––Additional health care costs in the United States in 2000 attributable to physical inactivity have been estimated at about $200 billion. (Sari, 2009) FIGURE 1.17B Age-Adjusted Percentage Distribution of Leisure-Time Aerobic Activity Levels Among Individuals Ages 25 and Older, by Education Level, 2011

NOTE: “Inactive” is participating in no leisure-time aerobic 100% Inactive 30% 17% activity that lasted at least 10 minutes. “Insufficiently Active” is participating in aerobic activities for at least 10 minutes 80% 54% 43% Insuf ciently Active 21% but less than 150 minutes per week. “Sufficiently Active,” which meets 2008 federal physical activity guidelines, is Suf ciently Active 60% 22% participating in moderate-intensity leisure-time physical (met guidelines) 19% activity at least 150 minutes per week, or in vigorous-intensity 40% 17% leisure-time physical activity at least 75 minutes per week, 48% 63% or an equivalent combination. Percentages shown were age- 20% adjusted using the projected 2000 U.S. population provided 29% 38%

Percentage of Individuals by the U.S. Census Bureau as the standard population. Age 0% adjustment was used to allow comparisons among various Less than a High Some College or Bachelor’s population subgroups that have different age distributions. High School School Associate Degree or Percentages may not sum to 100 because of rounding. Diploma Diploma Degree Higher SOURCE: Centers for Disease Control and Prevention, 2012, Education Level Table 29.

28 EDUCATION PAYS 2013 Part 1: Individual and Societal Benefits Health Benefits

Obesity

FIGURE 1.18A In 2007–2010, when 35% of all men Age-Adjusted Obesity Rates Among Adults Ages 25 and Older, by Gender and 36% of all women ages 25 and and Education Level, 1988–1994 and 2007–2010 over were defined as obese, 28% 1988–1994 Less than a High 23% of men and 26% of women with School Diploma 33% 2007–2010 bachelor’s degrees were obese. High School 22% Diploma 37% Some College or 22% ––Among those without four-year college degrees, Men Associate Degree 42% higher levels of education were not associated Bachelor’s Degree 16% with lower levels of obesity in 2007–2010. or Higher 28% 21% ––Obesity rates increased dramatically from All 35% 1988–1994 to 2007–2010 for both men and Less than a High 33% women at all levels of education. The largest School Diploma 44% increases were for those with some college or High School 28% Diploma 39% an associate degree.

Gender and Education Level Some College or 25% Associate Degree 40% ––In 2007–2010, 11% of boys and 7% of girls Women Bachelor’s Degree 17% ages 2–19 whose household head had at least or Higher 26% a bachelor’s degree were obese. Obesity rates 27% All 36% were much higher for children whose parents had 0% 10% 20% 30% 40% 50% lower levels of education. Obesity Rate ––The gap between the obesity rates of girls whose household head had a high school diploma and NOTE: Data from 1988 to 1994 were combined to generate estimates for 1988–1994; data from those whose household head had at least a 2007 to 2010 were combined to generate estimates for 2007–2010. Obesity is defined as body mass index (BMI) of 30 or higher, equivalent to being at least about 30 pounds overweight at bachelor’s degree increased from 7 percentage average heights. points (12% vs. 5%) in 1988–1994 to 14 SOURCE: National Center for Health Statistics, 2011a, Figure 37. percentage points (21% vs. 7%) in 2007–2010.

FIGURE 1.18B ALSO IMPORTANT: Obesity Rates Among Children and Adolescents Ages 2 to 19, by Gender and ––At least a portion of the correlation between obesity and Highest Household Education Level, 1988–1994 and 2007–2010 education levels is likely due to income and the prices of different types of food. Differences in exercise patterns Less than a High 15% 1988–1994 and in dietary knowledge and choices are also relevant. School Diploma 24% 2007–2010 ––Some estimates suggest the additional health care High School 11% Diploma 19% cost attributable to obesity was about $361 per adult in 2008; the total cost could increase fourfold by 2018 Boys Some College or 9% Associate Degree 18% if the current rate of increase in obesity continues. Bachelor’s Degree (United Health Foundation, 2009) or Higher * 11% ––More sophisticated statistical estimates of the health care costs of obesity are higher. Cawley and Less than a High 11% Meyerhoefer (2012) find that obesity raises annual School Diploma 22% medical costs by an average of $2,826 (in 2005 dollars). High School 12% They estimate the annual cost of treating obesity in the Diploma 21% adult population as $168.4 billion, or 16.5% of national

Girls Some College or 9% spending on medical care. Gender and Household Education Level Associate Degree 14% ––Research indicates that disparities in obesity by Bachelor’s Degree 5% or Higher 7% socioeconomic status increase with age. One estimate suggests that an additional year of maternal education 0% 10% 20% 30% 40% 50% reduces obesity by an average of 1.2 percentage points Obesity Rate and that this effect increases by 0.07 points per year of age. (Baum & Ruhm, 2009) * For boys from households with at least a bachelor’s degree, the variation within the group in 1988–1994 is too large to generate a reliable estimate. NOTE: Obesity is defined as a BMI at or above the 95th percentile for children of the same gender and age in months, based on the 2000 CDC growth charts for the United States. SOURCE: National Center for Health Statistics, 2011a, Figure 25.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 29 Other Individual and Societal Benefits

Parents and Children

Among both those who are employed and those who are not, the amount of time mothers spend on their children’s activities increases with levels of education.

––Employed mothers with four-year playing with their children increases with child-related activities. Differences college degrees report spending about level of education. When children are between those with bachelor’s degrees 51% more time (113 minutes vs. 75 between the ages of 3 and 5, mothers and those without are large, especially minutes per day) on their children’s with bachelor’s degrees report more play among mothers who are not employed. activities than employed mothers who time, but those with some college or an are high school graduates. Among those associate degree spend about the same who are not employed, the difference amount of time as high school graduates ALSO IMPORTANT: is about 42% (188 minutes vs. 132 playing with their children. ––Kalil, Ryan, and Corey (2012) find that “highly minutes per day). educated mothers not only spend more ––For older children, mothers spend more time in active child care than less educated ––The amount of time mothers with time facilitating children’s outside and mothers, but that they alter the composition children under the age of 3 report enrichment activities than on other of that time to suit children’s developmental needs more than less educated mothers.”

FIGURE 1.19A Percentage of Mothers Who Are Employed, by Age Total Amount of Time (in Minutes) Mothers Spend per Day on Children of Youngest Child and Mother’s Education Level, Under the Age of 18, by Employment Status and Education Level, 2003–2012 2003–2012 Age of Youngest Child Less than a High High School Some College or Bachelor’s School Diploma Diploma Associate Degree Degree or Higher Mother’s Education Under Under Between Between Between 200 188 Level 18 3 3 and 5 6 and 13 14 and 17

160 Less than a 141 High School 43% 32% 41% 48% 53% 132 132 124 Diploma 120 113 97 102 High School 95 65% 51% 59% 70% 76% 87 Diploma 80 75 61 Some College or 40 72% 61% 72% 76% 80% Associate Degree Amount of Time (in Minutes) Amount of Time 0 Employed Unemployed or All Bachelor’s Not in the Labor Force Degree or 75% 67% 75% 79% 82% Higher Employment Status

FIGURE 1.19B Total Amount of Time (in Minutes) Mothers Spend per Day on Children’s Activities, by Type of Activity, Age of Youngest Child, Mother’s Employment Status and Education Level, 2003–2012

100 88 Less than a High High School Some College or Bachelor’s School Diploma Diploma Associate Degree Degree or Higher 80 63 60 55 54 50 52 45 42 39 41 38 39 40 36 32 30 29 30 30 28 29 30 29 26 26 24 22 25 24 18 21 21 20 20 18 16 11 6 Amount of Time (in Minutes) Amount of Time 0 Employed Unemployed All Employed Unemployed All Employed Unemployed All or Not in the or Not in the or Not in the Labor Force Labor Force Labor Force Under 3, Play Activities Between 3 and 5, Play Activities Between 6 and 13, Management Activities Age of Youngest Child and Mother’s Employment Status

NOTE: Figures 1.19A, 1.19B and the table are based on the 2003–2012 American Time Use Surveys (ATUS) and include mothers ages 25 and older who have at least one “own child” in the household. “Play activities” include sports, arts and crafts, and general play with household children. “Management activities” include attending events, traveling, planning activities for children, picking up/dropping off children, and waiting for/with household children. SOURCES: Bureau of Labor Statistics, 2013; calculations by the authors.

30 EDUCATION PAYS 2013 Part 1: Individual and Societal Benefits Other Individual and Societal Benefits

Civic Involvement

Among adults ages 25 and older, 45% of those with at least a bachelor’s degree, 34% of those with some college or an associate degree, 21% of high school graduates and only 15% of those without a high school diploma reported understanding quite a bit or a great deal about the political issues facing our country.

––Among those with a high school diploma, 30% FIGURE 1.20A Understanding of Political Issues Among Individuals Ages 25 and Older, 2012 of adults reported understanding nothing or only a little about political issues. Fourteen percent of those with some college or an associate degree None A Little Some Quite a Bit A Great Deal and 11% of four-year college graduates gave 1% this response. Bachelor’s Degree 10% 44% 35% 10% or Higher ––The percentage of four-year college graduates who donate their time to organizations is over Some College or twice as high as the percentage of high school 5% 9% 52% 25% 9% Associate Degree graduates who volunteer. 3% ––Among adults with at least a bachelor’s degree, High School Diploma 8% 22% 49% 18%

Education Level 42% volunteered from Sept. 1, 2011, through

2% Sept. 1, 2012, and the median amount of time Less than a High they spent volunteering was 52 hours. The 29% of 8% 46% 32% 13% School Diploma adults with some college or an associate degree,

0% 20% 40% 60% 80% 100% the 17% of high school graduates, and the 9% of adults without a high school diploma who Percentage of Individuals volunteered gave similar amounts of their time.

NOTE: Figure 1.20A reports on responses to the following question: “How good is your understanding of the important political issues facing our country?” Percentages may not sum ALSO IMPORTANT: to 100 because of rounding. SOURCE: National Opinion Research Center, 2013, 2012 Experiment Topic Module. ––As is the case with most of the indicators included in this report, the correlation seen here should not necessarily be interpreted as causation. Personal characteristics may make people more likely both to pursue higher education and to volunteer. However, FIGURE 1.20B Percentage of Individuals Ages 25 and Older Who Volunteered and the statistical analysis suggests that the actual increments Median Number of Hours Volunteered, by Education Level, 2012 in volunteer activity attributable to increased education are similar to those described here. Enrolling in college significantly increases the likelihood of volunteering,

50% 42% controlling for other demographic characteristics. (Dee, (52 hours) 2004; Oreopoulos & Salvanes, 2011) 40% ––At each education level, within each age group, and 29% (50 hours) within each employment category, higher percentages 30% of women than of men volunteered. Overall, 24% of 17% 20% (50 hours) men and 30% of women ages 25 and older volunteered 9% in 2011–2012. (Bureau of Labor Statistics, 2013c, Table 1) 10% (52 hours)

Percentage Volunteering ––Volunteering was most common among the 35–44 age group (32%), and least common among those ages 20 0% Less than a High School Some College or Bachelor’s Degree to 24 (19%). (Bureau of Labor Statistics, 2013c, Table 1) High School Diploma Diploma Associate Degree and Higher Education Level

NOTE: Volunteers are defined as individuals who performed unpaid volunteer activities for organizations during the year ending September 2012. SOURCE: Bureau of Labor Statistics, 2013c, Tables 1 and 2.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 31 Other Individual and Societal Benefits

Voting

In the 2012 presidential election, the voting rate of 25- to 44-year-old four-year college graduates (73%) was 1.7 times as high as the voting rate of high school graduates (42%) in the same age group. In the 2010 election, 25- to 44-year-old four-year college graduates were twice as likely to vote as high school graduates in the same age group.

––At all levels of education, voting rates college graduates ages 45 and older ALSO IMPORTANT: increase with age, but the increase to 15% for those ages 75 and older is generally greater for those with without a high school diploma. ––The highest overall voting rate in presidential lower levels of education. In 2012, elections since 1972 was 65% in 1992. In 2008 and the voting rate for 65- to 74-year-old ––Within each age group, registration 2012, 64% and 62% of citizens ages 18 and older high school graduates was 1.6 times rates increase with education level. voted, respectively. The highest voting rate among the rate for 25- to 44-year-old high In 2012, the percentage of citizens not four-year college graduates was in 1992 (85%), but school graduates. For four-year college registered to vote (or not responding to the 1972 presidential election saw the highest voting graduates, the voting rate was 1.2 the registration question) ranged from rates for those without a bachelor’s degree. (U.S. times as high for the older group as 13% for four-year college graduates Census Bureau, 2012i, Historical CPS Time Series Tables, Table A-2) for the younger group. between the ages of 65 and 74 to 69% for those between the ages of 18 and ––In 2012, the percentage of citizens 24 without a high school diploma. who were registered but did not vote ranged from 3% to 4% for four-year

FIGURE 1.21A FIGURE 1.21B Voting Rates Among U.S. Citizens, by Age and Percentage Distribution of Voting Patterns of U.S. Education Level, 2010 and 2012 Citizens in the 2012 Presidential Election, by Age and Education Level

2010 2012 Voted Registered, No Vote Not Registered

9% 23% Less than a High School Diploma 23% 8% 69% 15% 29% High School Diploma 29% 13% 58% 27% 50% Some College or Associate Degree 18 to 24 50% 14% 36% 18 to 24 33% 63% Bachelor’s Degree or Higher 63% 12% 26%

15% 26% Less than a High School Diploma 26% 14% 60% 25% 42% High School Diploma 42% 14% 44% 38% 58% Some College or Associate Degree 58% 13% 29% 25 to 44 25 to 44 51% 73% Bachelor’s Degree or Higher 73% 8% 19%

26% 39% Less than a High School Diploma 39% 13% 48% 44% 59% High School Diploma 59% 10% 31% 58% 72% Some College or Associate Degree 72% 7% 20% 45 to 64 45 to 64 69% 80% Bachelor’s Degree or Higher 80% 15% 4%

Age and Education Level 39% 53% Less than a High School Diploma 53% 12% 35% Age and Education Level 58% 69% High School Diploma 69% 7% 24% 68% 78% Some College or Associate Degree 78% 5% 17% 65 to 74 65 to 74 75% 84% Bachelor’s Degree or Higher 84% 13% 3%

40% 54% Less than a High School Diploma 54% 15% 31% 58% 69% High School Diploma 69% 10% 21% 67% 78% Some College or Associate Degree 78% 7% 15% 75 and Over 77% 80% Bachelor’s Degree or Higher 80% 15% 75 and Over 4% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Voting Rate Percentage of U.S. Citizens

NOTE: “Not registered” includes both those who reported that they were not registered and those who did not respond to the registration question. Percentages may not sum to 100 because of rounding. SOURCES: U.S. Census Bureau, 2010d, 2012i, Table 5; calculations by the authors.

32 EDUCATION PAYS 2013 Part 1: Individual and Societal Benefits Part 2: The Distribution of the Benefits: Who Participates and Succeeds in Higher Education?

Participation and success rates in higher education differ As the data reported in Part 1 of Education Pays reveal, considerably among demographic groups. Although the gaps adults with some college but no degree earn more and have in college enrollment rates across racial/ethnic groups have different life experiences than high school graduates. They do narrowed over time, the gaps between the least privileged youth not, however, fare as well as those who earn degrees. There and their more affluent peers have grown. The percentage of is a growing and valid concern about the detrimental effect high school graduates from the lowest family income quintile on individuals and the wasted resources resulting from low enrolling immediately in college has been stagnant for over a degree completion rates. The indicators that follow rely on a decade, while participation rates for middle- and upper-income variety of sources to provide multiple views of the educational youth have continued to increase. experiences of different groups of students.

When they do enroll in college, students from low-income families The number of postsecondary certificates awarded doubled are less likely than others to enroll in four-year institutions and between 2001 and 2011, and over 40% of the credentials particularly unlikely to enroll in the selective institutions for which awarded in 2011 were associate degrees or short-term they would likely qualify. Moreover, outcomes are highly correlated certificates, as opposed to bachelor’s degrees. Our goal in with family incomes. The percentage of enrolling students from highlighting gaps in educational attainment is not to suggest the highest family income quintile earning bachelor’s degrees that everyone needs a bachelor’s degree or that success in life within six years is twice as high as the percentage from the should be defined by education level. lowest family income quintile achieving this outcome. And the percentage of those from the least affluent families leaving school Individual preferences, goals, and capabilities differ. However, the without a credential is over twice as high as the percentage of differences across demographic groups documented here are those from the most affluent families experiencing this outcome. unsettling. The gap between students from high- and low-income backgrounds in degree attainment is much larger than the gap in While international comparisons receive more attention, there college enrollment. The enrollment and degree attainment rates of is considerable variation in educational attainment across women have far outpaced those of men in recent years, and black states in the U.S. These differences are likely explained by a and Hispanic students have not caught up with white students. combination of factors, including demographics and financing patterns. Financing patterns are also important to international The data on college enrollment and completion reported in the comparisons. As Figure 2.12 indicates, the United States relies following pages are more disturbing in light of the benefits for relatively less on public financing and more on household individuals and for society documented in Part 1 of Education financing than most other developed countries. Pays. Limited participation in postsecondary education seriously constrains individual opportunities and living standards. Society Documenting the different patterns observed among segments as a whole suffers from lower levels of civic engagement of the population is an important first step toward generating and from unnecessary barriers to the success of the next awareness that a problem exists and finding solutions. But generation, in addition to a loss of productivity and output, careful interpretation of the evidence and in-depth analysis when individuals miss out on educational opportunities. of the causes of differences in educational attainment are prerequisites to real progress. A shortage of money may The indicators on the following pages describe pressing interfere with educational opportunities, but money cannot problems for our nation. We hope readers will use this remove all the barriers faced by many individuals. information to work toward constructive solutions.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 33 College Enrollment

College Enrollment by Income

In 2012, when about 82% of high school graduates from families with incomes above $90,500 enrolled immediately in college, 65% of those from the middle income quintile ($34,060 to $55,253) and 52% of those from families with incomes below $18,300 enrolled.

––From 2001 through 2009, high school graduates FIGURE 2.1 in the lowest income quintile went to college at Postsecondary Enrollment Rates of Recent High School Graduates by Family Income, 1987 to 2012 about the same rate as those from families in the second quintile. However, the gap between these two groups grew from 3 percentage points 100% Highest Income in 2009 to 6 points in 2012. Quintile ––Between 1992 and 2002, the college enrollment 80% 4th Income Quintile rate grew most rapidly for students from the lowest family-income quintile, increasing 8 3rd Income 60% Quintile percentage points (19%) from 42% to 50%, while remaining relatively stable for higher- 2nd Income Quintile income students. 40% Enrollment Rate Lowest ––Between 2002 and 2012, the enrollment rate Income Quintile grew only slightly at the bottom and the top of 20% the income distribution, with more rapid growth for middle-income students, particularly those in the third income quintile. In 2012, 65% of this 0% group enrolled in college immediately after high 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2012 school, an increase from 55% a decade earlier. Year

ALSO IMPORTANT: NOTE: Based on enrollment in college within 12 months of high school graduation. Income quintiles are defined in terms of all households. In 2012, the upper income limits of the ––Because of the difficulty of accounting for young people quintiles were: lowest, $18,300; 2nd, $34,059; 3rd, $55,253; and 4th, $90,500. High school who leave their parents’ homes, the Census data on graduates are not evenly distributed among income quintiles because graduation rates which Figure 2.1 is based are likely to underestimate are lower among students from low-income backgrounds. Enrollment rates reflect moving averages. the gaps in enrollment rates. When high school SOURCE: U.S. Census Bureau, 2013. graduates move away but do not enroll in college they form their own households. This pattern is more common among low-income households and these nonenrollees are not included.

Postsecondary Enrollment Rates of Recent High School Graduates by Family Income ––Immediate enrollment rates of high school graduates Percentage do not capture students who wait more than a year Point Change after graduation to continue their education, a pattern Between 1987 Income Quintile 1987 1992 1997 2002 2007 2012 and 2012 more common among lower-income students than among those from higher income backgrounds. Lowest 37% 42% 47% 50% 54% 52% + 15 2nd 35% 46% 43% 52% 55% 58% + 23 3rd 47% 53% 62% 55% 62% 65% + 18 4th 60% 65% 68% 65% 69% 71% + 11 Highest 73% 78% 81% 78% 80% 82% + 9

34 EDUCATION PAYS 2013 Part 2: Distribution of Benefits College Enrollment

College Enrollment by Race/Ethnicity

FIGURE 2.2A The gaps between the college Postsecondary Enrollment Rates of Recent High School Graduates by Race/ enrollment rates of black and Ethnicity, 1974 to 2011 Hispanic high school graduates White, Non-Hispanic and white high school graduates Hispanic Black, Non-Hispanic narrowed considerably between 80% 2001 and 2011. In 2011, 70% of 70% white, 66% of black, and 62% of 65% 63% 66% Hispanic high school graduates

60% 56% 62% enrolled in college within a year of 52% 49% 52% completing high school. 48% 50% 49% 49% 44% 40% 41% ––In 2001, when 65% of white recent high school graduates enrolled in college, only 56% of black

Enrollment Rate students and 49% of Hispanic students followed this path within one year. 20% ––Although these gaps have also narrowed over the past decade, 44% of all white 18- to 24-year-olds 0% were postsecondary students in 2011, while only 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2011 36% of blacks and 31% of Hispanics in this age Year range were enrolled.

FIGURE 2.2B ––Differences in high school graduation rates Postsecondary Enrollment Rates of All 18- to 24-Year-Olds by Race/Ethnicity, account for part of the difference between the 1974 to 2011 enrollment rates graphed in Figure 2.2A and White, Non-Hispanic Figure 2.2B. In 2010, 89% of whites, 83% of Hispanic blacks, and 73% of Hispanics between the ages Black, Non-Hispanic of 18 and 24 were high school graduates (NCES 80% 2012a, Table 213).

ALSO IMPORTANT: 60% ––Blacks compose about 15% of the 18- to 24-year-old population, and Hispanics represent about 18%. 44% ––About 1.9% of blacks, 1% of Hispanics, and 0.2% of 39% 38% 40% 35% whites between the ages of 18 and 24 are in prison. 31% 31% These individuals are excluded from the population 27% Enrollment Rate 26% 24% reported on in Figures 2.2A and 2.2B. 17% 20% 21% 20% 17% (SOURCES: Bureau of Justice Statistics, 2012, Table 7; U.S. 16% 16% Census Bureau, 2012c, Table 10.)

––Postsecondary enrollment rates are higher for Asians 0% than for other racial/ethnic groups. In fall 2011, when 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2011 71% of white recent high school graduates enrolled Year immediately in college, 88% of Asians continued their education. Two-thirds of Asians ages 18 to 24 were Figure 2.2A shows the percentage of high school graduates who enrolled in enrolled in postsecondary institutions in 2011. college within 12 months of high school graduation. Figure 2.2B shows the percentage of all 18- to 24-year-olds in the civilian noninstitutionalized population (i.e., not in the military or in prison) enrolled in college in the specified year. This population includes those who have not completed high school.

NOTE: Postsecondary enrollment includes undergraduate and graduate students. Enrollment rates are three-year moving averages. Because of small sample sizes for Hispanics and blacks, annual fluctuations in enrollment rates may not be significant. SOURCES: National Center for Education Statistics, 2013a, Tables 235 and 239; calculations by the authors.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 35 College Enrollment

College Enrollment by Gender and Age

FIGURE 2.3A In 2001, 60% of males and 65% Postsecondary Enrollment Rates of Recent High School Graduates and of All of females who had completed 18- to 24-Year-Olds by Gender, 1971 to 2011 high school in the past year were

Recent High School Graduates All 18- to 24-Year-Olds enrolled in college. By 2011, those Female Male Female Male percentages had increased to 64% 80% 73% and 73%, respectively.

64% 65% ––As shown in Figure 2.3A, in 2011, 39% of males 58% 64% 60% 60% 51% 58% and 44% of females between the ages of 18 and 24 were enrolled in college. 51% 44% 49% 38% 40% ––In 1971, males were 9 percentage points more 33% 32% 39% likely than females to enroll in college immediately 33% Enrollment Rate 26% 32% after completing high school. Between 2001 and 25% 2011, the enrollment rate for recent female 20% 21% graduates exceeded the enrollment rate for recent male graduates by 5 percentage points, on average. 0% 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011 ––In 1971, males between the ages of 18 and Year 24 were 13 percentage points more likely than females of the same ages to be enrolled in NOTE: “Recent high school graduates” completed high school during the 12 months college. By 1981, the gap had narrowed to 2 preceding postsecondary enrollment. “Postsecondary enrollment” includes both undergraduate and graduate students. Some 18- to 24-year-olds have completed college percentage points. By 2001, the enrollment rate and are no longer enrolled. They are not included in enrollment rates. Enrollment rates are for females was 5 percentage points higher than three-year moving averages. the rate for males, and the gap has remained 6 to SOURCES: National Center for Education Statistics, 2013a, Tables 234 and 239; calculations by 7 percentage points since that time. the authors. ––The percentage of all 18- and 19-year-olds enrolled in postsecondary education increased FIGURE 2.3B from 38% in 1971 to 43% in 1991 and 44% in Postsecondary Enrollment Rates of All 18- to 34-Year-Olds by Age, 2001. The enrollment rate for this age group had 1971 to 2011 grown to 50% by 2011. The pattern for 20‑ and 21-year-olds was similar. The most rapid growth 80% 18–19 in enrollment rates for young people was in the 20–21 22–24 1980s and the 2000s. 25–29 60% 30–34 ALSO IMPORTANT: 52% ––In 2011, 7.7% of males and 6.5% of females between 45% 50% 43% the ages of 16 and 24 had not completed high school and 44% 40% 38% were not enrolled. (NCES, 2013a, Table 128) 36% 40% 30% ––The percentage of all postsecondary students who were Enrollment Rate 33% 31% 25% 21% over the age of 30 rose from 15% in 1970 to 22% in 1980, 20% and to 29% in 1990. From 2001 to 2011, 24% to 25% of 15% 16% 14% students were in this age range. 10% 11% 8% 9% ––The percentage of all postsecondary students (including 7% 8% 5% 7% 6% 0% graduate students) who were age 21 or younger fell from 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011 55% in 1970 to 40% in 1990. From 2001 to 2011, 44% to Year 45% of students were in this age range.

––In both 2001 and 2011, just over half of all undergraduate NOTE: Includes all 18- to 34-year-olds, whether or not they have graduated from high school. “Postsecondary enrollment” includes part-time and full-time enrollment in an institution with students were age 21 or younger, and between 21% and programs of at least two years. Enrollment rates are three-year moving averages. 22% were over the age of 30. SOURCES: National Center for Education Statistics, 2013a, Table 7; calculations by the authors. (NCES, 2013a, Table 225; NCES, 2004b, Table 177)

36 EDUCATION PAYS 2013 Part 2: Distribution of Benefits College Enrollment

Stratification Within Higher Education

FIGURE 2.4A Lower-income students, who come Family Income Distribution of Dependent Students Within Postsecondary from families with incomes less Sectors (with Percentage of Students Enrolled in Each Sector), 2011-12 than $29,600, are overrepresented in the for-profit and two-year public Less than $29,600 $29,601 to $65,460 $65,461 to $106,360 $106,361 or More sectors, but underrepresented Private Nonprot 18% 23% 27% 33% in four-year public and private Four-Year (16%) nonprofit institutions. The reverse Public Four-Year (38%) 22% 23% 26% 29% is true for higher-income students, who come from families with Public 30% 29% 24% 17% Two-Year (32%) incomes above $106,360.

Postsecondary Sector For-Prot (5%) 45% 27% 17% 11% ––Among dependent students from the lowest family income quartile of undergraduate Attended More than 21% 23% 26% 30% One Institution (9%) students, 38% were enrolled in public two-year colleges in 2011‑12, while 44% attended four-year 0% 20% 40% 60% 80% 100% public or private nonprofit colleges. Percentage of Students ––Among dependent students from the highest family income quartile of undergraduate FIGURE 2.4B students, 22% were enrolled in public two-year Dependent Students’ Postsecondary Sector by Family Income, 2011-12 colleges, while 65% attended four-year public or private nonprofit colleges.

Public Public Private Nonprot For-Prot Attended More than Two-Year Four-Year Four-Year One Institution ––Only 5% of dependent undergraduate students attended for-profit institutions, but 20% of independent students were enrolled in this Less than $29,600 38% 32% 12% 10% 8% sector. While 54% of dependent students attended four‑year public and private nonprofit colleges and universities, only 27% of $29,601 to $65,460 36% 35% 15% 6% 9% independent students were enrolled in these sectors. 4%

Family Income $65,461 to $106,360 31% 39% 17% 10% ALSO IMPORTANT: 2% ––In 2011-12, 51% of undergraduate students were $106,361 and Higher 22% 44% 11% 21% independent and 49% were dependent. About

0% 20% 40% 60% 80% 100% two‑thirds of the undergraduate students at both public four‑year and private nonprofit four-year Percentage of Students institutions were dependent. But only 40% of public two-year college students and 23% of undergraduates NOTE: The income brackets in Figures 2.4A and 2.4B represent quartiles of family income for all dependent undergraduate students enrolled in 2011-12. The “Attended More than One enrolled in for-profit institutions were dependent. Institution” category shown here includes the 9% of dependent students who were enrolled in (NCES, 2013b) more than one institution. Omitted here are a small number of students (about 1%) who were enrolled in less-than-two-year public and less-than-four-year private nonprofit institutions. Percentages may not sum to 100 because of rounding. SOURCES: National Center for Education Statistics, 2013b; calculations by the authors.

2011-12 Undergraduate Enrollment by Dependency Status and Sector Private Attended Public Public Nonprofit More than Two-Year Four-Year Four-Year For-Profit One institution Dependent 32% 38% 16% 5% 9% Independent 44% 20% 7% 20% 7%

SOURCE: NCES, 2013b.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 37 College Enrollment

Stratification Within Higher Education

Virtually all 2004 high school graduates eligible for very selective colleges enrolled immediately after high school. However, 53% of lower-SES and 40% of upper-SES students with these characteristics enrolled in either less selective four-year institutions or in two-year colleges.

––Among high school graduates eligible for somewhat selective ALSO IMPORTANT: colleges, 8% of lower-SES students did not enroll anywhere and another 42% “undermatched.” Among those from ––Numerous studies have shown that students who enroll in the most upper-SES families, only 3% did not enroll in college and 26% selective colleges for which they are qualified are more likely to earn “undermatched.” bachelor’s degrees than similar students who attend colleges where most students are less well prepared academically. (Bowen, Chingos, ––Among students who had little chance of admission to any & McPherson, 2009; Light & Strayer, 2000; Nagaoka, Roderick, & four-year college, 49% of lower-SES and 29% of upper-SES Coca, 2009) high school graduates did not enroll in college, passing up or Academic Undermatching of 1992 and 2004 High School Graduates postponing the opportunity to attend a community college. Lower SES Upper SES ––The percentage of lower-SES students not applying to any Class of Class of Class of Class of colleges declined from 40% in 1992 to 24% in 2004. For upper- 1992 2004 1992 2004 SES students, the decline was from 13% to 7%. No applications 40% 24% 13% 7% Applied to less selective schools only 16% 9% 23% 12% ––The percentage of lower-SES students applying to at least Did not enroll 1% 1% 1% 0% one school of the highest selectivity for which they qualified Enrolled in less selective school 15% 8% 23% 11% increased from 45% in 1992 to 67% in 2004. However, 69% of Applied to match schools 45% 67% 65% 81% lower-SES students qualified only for public two-year colleges, Rejected, did not enroll 1% 2% 1% 1% while 12% qualified for very selective or selective colleges. Rejected, enrolled in less selective school 1% 2% 2% 3% ––The percentage of upper-SES students applying to at least Accepted, did not enroll 4% 9% 2% 4% one school of the highest selectivity for which they qualified Accepted, enrolled in less selective school 4% 4% 8% 8% increased from 65% in 1992 to 81% in 2004. Among upper-SES Accepted, enrolled in match school 34% 50% 52% 66% students, 35% qualified only for two-year public colleges and NOTE: Percentages may not sum to 100 because of rounding. another 35% qualified for very selective or selective colleges. SOURCE: National Center for Education Statistics, 2000 and 2008.

FIGURE 2.5 Percentage of High School Seniors Not Enrolling in College or Enrolling in Less Selective Colleges than Those for Which They Qualify for Admission by Socioeconomic Status, 2004

100% Lower-SES Undermatched (by one level) Higher-SES Undermatched (by one level)

80% Lower-SES Substantially Undermatched (by two or more levels) Higher-SES Substantially Undermatched (by two or more levels) Lower-SES Not Enrolled Higher-SES Not Enrolled 60%

12% 35% 40% 31% 25% 30% 8%

Percentage of Students 30% 20% 30% 25% 49% 20% 29% 21% 17% 1% 15% <1% 11% 2% 3% 5% 8% 10% 8% 0% Lower- Higher- Lower- Higher- Lower- Higher- Lower- Higher- Lower- Higher- SES (1%) SES (8%) SES (11%) SES (27%) SES (11%) SES (20%) SES (9%) SES (10%) SES (69%) SES (35%) Very Selective Selective Somewhat Selective Nonselective Two-Year

Socioeconomic Status (SES) and College Selectivity Category for Which Students Quali ed

Students are defined as “undermatching” if they enroll in institutions less selective than the most selective at which they would have an estimated probability of at least 90% of being admitted. Nonenrollment is reported separately from undermatching. NOTE: Lower-SES refers to the lower half of the socioeconomic distribution and higher-SES refers to the upper half. College selectivity levels are based on Barron’s categories and are determined by the SAT scores, GPA, and acceptance rates of applicants and enrollees. Students’ access to college selectivity levels is predicted by their academic credentials. Percentages on the horizontal axis show the percentage of students in the indicated SES category who qualified for admission to institutions in the specified selectivity category. SOURCE: National Center for Education Statistics, 2008.

38 EDUCATION PAYS 2013 Part 2: Distribution of Benefits Educational Attainment

Degrees and Certificates Awarded

FIGURE 2.6A In 2011-12, 58% of the 4.9 Postsecondary Degrees and Certificates Awarded, 2011-12 million postsecondary degrees and certificates awarded were Doctoral Degrees Certi cates of Less than One Year bachelor’s or advanced degrees.

Master’s Degrees The other 42% were certificates or 3% 10% Certi cates of One Year to Less than Four Years in Length associate degrees. Post-Baccalaureate 16% 11% or Higher Certi cates 1% ––Ninety-one percent of the credentials awarded by private nonprofit institutions, 90% of those Total 4.9 Million Associate Degrees awarded by public four-year institutions, and 58% 21% of those awarded by four-year for-profit institutions were bachelor’s, master’s, or doctorate degrees. Bachelor’s Degrees 38% Almost no baccalaureate or advanced degrees were awarded by public two‑year and for-profit two-year or less institutions.

––The number of postsecondary certificates awarded increased from 550,000 in 2001-02 FIGURE 2.6B to almost 1.1 million in 2011-12, an increase of Percentage Distribution of Degrees and Certificates Awarded by Sector, 92%. The most rapid growth (114%) was for 2011-12 certificates requiring between one and two Certi cates Certi cates Associate Bachelor’s Post- Master’s Doctoral years of study. of Less than of One Year Degrees Degrees Baccalaureate Degrees Degrees One Year to Less than or Higher Four Years Certi cates ––In 2011-12, 44% of the certificates awarded were in Length for programs of less than one year in duration, while 46% were for programs requiring between For-Pro t 29% 56% 15% Two-Year or Less one and two years of study. 2% 1% 0% For-Pro t 5% 35% 34% 21% Four-Year or More 2% Public Two-Year or Less 25% 18% 56% 1% 1% 0% Public Four-Year 7% 65% 19% 5% or More 2% 2% All Private 5% 52% 30% 7% Nonpro t 2% 1% 0% 20% 40% 60% 80% 100%

Percentage

FIGURE 2.6C Number of Certificates Awarded by Type, 2001-02 and 2011-12

Certi cates Certi cates Certi cates Post-Baccalaureate of Less than of One Year of Two Years or Higher Certi cates One Year to Less than to Less than NOTE: Degrees reported in these figures were conferred Two Years Four Years in Length during the 12-month period July 1, 2011, to June 30, 2012. The 5% number of degrees includes those from U.S. institutions, Title IV and non-Title IV participating, and both degree-granting and 2011-12 44% 46% 1,060,000 non-degree-granting institutions. Percentages may not sum to 5% 4% 100 because of rounding. 2001-02 49% 42% 550,000 SOURCES: National Center for Education Statistics, 2013c; 4% calculations by the authors. 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000

Number of Certi cates Awarded

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 39 Educational Attainment

College Completion

FIGURE 2.7A Among students who began Percentage Distribution of Outcomes for Students Beginning Postsecondary college in 2006 at age 24 or Study in 2006 (with Percentage of Students in Each Category) younger and enrolled exclusively

Completed at Completed at Still Enrolled No Degree, full time, 78% had earned a degree Starting Institution Different Institution Not Enrolled or certificate six years later. 4% Full-Time (37%) 67% 11% 18% 3% ––Eleven percent of these traditional-age full- Part-Time (3%) 7% 13% 77% time students (15% of those who completed credentials) completed their studies at an institution Mixed FT/PT 25% 16% 28% 31% other than the one at which they first enrolled.

24 or Younger (82%) 24 or Younger (43%)

4% ––The 7% of students who enrolled exclusively part Full-Time (5%) 56% 36% time had very low completion rates, with 77% of 3% 4% students ages 24 or younger and 62% of older Part-Time (4%) 24% 11% 62% students leaving college without a degree or

Over 24 (18%) Mixed FT/PT certificate. 31% 9% 20% 40% (8%) 0% 20% 40% 60% 80% 100% ––Among students who began their postsecondary Percentage studies in 2003-04, 58% of dependent students SOURCE: Shapiro et al., 2012, Table 7. from the highest family income quartile (with family incomes of $88,517 or more), 26% of those FIGURE 2.7B with family incomes below $30,489, and 6% Percentage Distribution of Outcomes by Dependency Status and Family Income, Students Enrolling in 1989-90, 1995-96, and 2003-04 of independent students had earned bachelor’s degrees by 2009. Attained Attained Attained No Degree, No Degree, Bachelor's Degree Associate Degree Certi cate Still Enrolled Left Without Returning ––Twenty percent of dependent students from the highest income quartile, 38% from the lowest 2003-04 26% 9% 11% 16% 38% family income quartile, and 52% of independent 1995-96 26% 15% 11% 16% 33% students had not earned a credential and were

1989-90 17% 11% 18% 13% 42% no longer enrolled in 2009. Lowest Quartile ––The percentage of beginning postsecondary 2003-04 35% 11% 6% 17% 31% students from the lowest family income quartile 1995-96 32% 10% 9% 17% 32% who earned a credential in 5 or 6 years increased from 46% in 1989-90 to 52% in 1995-96, but 2nd Quartile 1989-90 26% 13% 11% 15% 35% declined to 46% for the 2003-04 cohort.

2003-04 44% 10% 5% 14% 27% ––For those from the highest income quartile, 1995-96 40% 12% 4% 16% 28% completion rates increased from 62% to 67% to 68% over these years. Credential completion 3rd Quartile 1989-90 35% 12% 10% 14% 30% Dependent Students’ Family Income rates were 37%, 40%, and 34%, respectively, for independent students. 2003-04 58% 8% 12% 20% 2% 1995-96 57% 7% 14% 19% ALSO IMPORTANT: 3% 1989-90 43% 12% 7% 13% 25%

Highest Quartile ––Official college graduation rates include only first-time full-time students who complete their degrees or certificates at the same institution at which they 2003-04 6% 10% 18% 15% 52% first enrolled.

1995-96 9% 27% 12% 48% ––The official six-year graduation rate for four-year 4% Students institutions increased from 55% for the 1996 starting

Independent 1989-90 5% 8% 24% 11% 52% cohort to 58% for the 2005 cohort. The three-year 0% 20% 40% 60% 80% 100% completion rate for students enrolling full time in two-year Percentage institutions was between 28% and 31% for all cohorts NOTE: The upper income limits of the 2003-04 cohort quartiles were: lowest, $30,489; 2nd, $56,068; from 2005 through 2008. (NCES, 2013a, Tables 376 and 3rd, $88,516. Students classified as full time were enrolled full time throughout their studies. 377) SOURCES: National Center for Education Statistics, 1994, 2001, and 2009; calculations by the authors.

40 EDUCATION PAYS 2013 Part 2: Distribution of Benefits Educational Attainment

Educational Attainment over Time

FIGURE 2.8A The percentage of adults in the Education Level of Individuals Ages 25 to 34, 1940–2012 U.S. between the ages of 25 and 34 with a four-year college Less than a High School Some College Bachelor’s degree grew from 6% in 1950 to High School Diploma or Associate Degree Diploma Degree or Higher 24% in 1980 and 1990. In 2012, 34% of adults in this age group 2012 11% 27% 29% 34% had earned a bachelor’s degree 2011 11% 27% 29% 33% or higher. 2010 12% 27% 28% 33% 2000 12% 31% 28% 29% ––The percentage of adults ages 25–34 with some 1990 14% 41% 22% 24% college or an associate degree grew rapidly in the 1970s and again in the 1990s but has stabilized at Year 1980 15% 40% 22% 24% 28% to 29% since 2000. 1970 26% 44% 14% 16%

1960 42% 36% 11% 11% ––In 1940, only 13% of adults in the U.S. ages 25–34 had any education beyond high school. 1950 51% 34% 10% 6% That percentage had risen to 46% by 1980 and to 1940 64% 22% 7% 6% 63% by 2012. 0% 20% 40% 60% 80% 100% ––In 2012, when 34% of adults ages 25–34 had a Percentage of Individuals bachelor’s degree or higher and 63% had at least some college, 33% of those ages 35–54 had NOTE: Percentages may not sum to 100 because of rounding. four-year degrees and 60% had at least some SOURCE: U.S. Census Bureau, 2012g, Table A-1. college. Attainment levels were lower for those ages 55 and older, among whom 28% had a bachelor’s degree or higher and 52% had at least some college. FIGURE 2.8B Percentage of Adults with Some College or an Associate Degree and with a Bachelor’s Degree or Higher, by Age Group, 2002 and 2012 ALSO IMPORTANT: ––The fact that the earnings differential between high 100% school graduates and college graduates has increased Some College or Associate Degree over time despite the increasing prevalence of college Bachelor’s Degree or Higher degrees indicates that the demand for college-educated 80% workers in the labor market has increased more rapidly than the supply. (See Goldin and Katz [2008] and Autor [2010] for discussion of the failure of the supply of 60% college graduates to keep up with the demand.)

––According to the Organisation for Economic 28% 29% 28% 27% 40% 24% Co-operation and Development (OECD), in 2011, 20% when 33% of adults ages 25–34 in the U.S. had

Percentage of Individuals four-year college degrees, the highest attainment 20% rates were 46% in Norway and 39% in Korea, Poland, 31% 34% 29% 33% 21% 28% and the U.K. (OECD, 2013, Table A1.3a)

0% ––In 2011, when 43% of adults ages 25–34 in the U.S. 2002 2012 2002 2012 2002 2012 had either bachelor’s degrees or vocational associate Ages 25−34 Ages 35−54 Ages 55 and older degrees, the highest attainment rates for comparable Year and Age Group degrees were 64% in Korea and 59% in Japan. (OECD, 2013, Table A1.3a)

NOTE: Percentages may not sum to 100 because of rounding. SOURCE: U.S. Census Bureau, 2012g, Table A-1.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 41 Educational Attainment

Educational Attainment by Race/Ethnicity and Gender

FIGURE 2.9 Among blacks, whites, and Percentage of 25- to 29-Year-Olds Who Have Completed High School, Some Hispanics, larger percentages of College, or a Bachelor’s Degree, by Race/Ethnicity and Gender, 1973–2012 females than of males between the ages of 25 and 29 had completed Females Males At Least a High School Diploma At Least a High School Diploma high school, had completed some At Least Some College Experience At Least Some College Experience college, and had completed At Least a Bachelor’s Degree At Least a Bachelor’s Degree bachelor’s degrees in 2012. Black, Non-Hispanic 100% ––The percentage of black females ages 25 to 29 87% 90% 83% who had completed a bachelor’s degree doubled 79% 87% 80% 87% 80% from 12% in 1982 to 24% in 2012, while the 78% 60% percentage of black males with four-year degrees 60% 54% rose from 11% to 16%.

37% 50% 51% 40% 35% ––The percentage of Hispanic females ages 25 to Percentage 34% 34% 24% 29 who had completed a bachelor’s degree more 20% 18% than doubled, from 7% in 1982 to 17% in 2012, 12% 13% 18% 16% while the percentage of Hispanic males with 11% 11% 0% four-year degrees rose from 9% to 11%. 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Year ––The percentage of white females ages 25 to 29 who had completed a bachelor’s degree almost Hispanic doubled, from 22% in 1982 to 43% in 2012, 100% while the percentage of white males with four-year degrees rose from 26% to 35%. 80% 75% 66% ––Over the decade from 1992 to 2002, most of 60% 59% 69% 60% the gaps in bachelor’s degree attainment across 59% 58% 60% racial/ethnic groups remained stable, but the gap 44% 40% 36% between white and black males grew from 13 Percentage percentage points in 2002 to 15 points in 2007 25% 26% 35% 29% and to 19 points in 2012. 20% 22% 24% 17% 9% 10% 11% 7% 8% 9% 11% 0% ALSO IMPORTANT: 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Year ––Educational attainment is higher for U.S.-born Hispanics than for Hispanic immigrants. Among Hispanic adults ages 25 and older in 2011, about 15% White, Non-Hispanic of those born outside the U.S. and 33% of those born 100% 94% 95% 89% 91% in the U.S. to immigrant Hispanic mothers had some 93% 94% 89% 89% college experience but less than a bachelor’s degree. 80% 75% 69% Seventeen percent of the second generation had at 64% least a bachelor’s degree, compared to only 10% of 60% Hispanic immigrants. (U.S. Census Bureau, 2012e) 49% 51% 61% 43% 50% ––Hispanics include individuals from many different 40% 44% 37% Percentage countries, with considerable variation in educational 26% 27% 35% 32% attainment rates. For example, both first- and 20% 27% 22% second-generation Mexican immigrants are much less likely than immigrants from other Latin 0% American countries to have completed college. 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Year (U.S. Census Bureau, 2012e)

NOTE: Enrollment rates are three-year moving averages. SOURCES: National Center for Education Statistics, 2010; U.S. Census Bureau, 2009, 2010b, 2011b, and 2012c, Table 1; calculations by the authors.

42 EDUCATION PAYS 2013 Part 2: Distribution of Benefits Educational Attainment

Science, Technology, Engineering, and Mathematics (STEM) Fields Students who enter the fields of engineering and mathematics are more likely than other students to earn their bachelor’s degrees in the fields in which they began.

––While 24% of 2004 high school graduates had earned math-related jobs one year after graduation had majored in STEM bachelor’s degrees by 2009, only 4% (17% of those earning fields. Twenty percent majored in social sciences, humanities, or degrees) earned bachelor’s degrees in STEM fields. While education, and 21% majored in business. 2.5% of high school graduates were employed in STEM fields a year after graduating from college, about 38% of the STEM ALSO IMPORTANT: graduates did not have STEM jobs. ––In 2008, 31% of bachelor’s degrees, 20% of master’s degrees, ––Many STEM jobs are filled by non-STEM majors. Only 53% and 67% of doctoral degrees were in STEM fields. (National Science of 2003-04 beginning postsecondary students who earned Foundation, 2013) bachelor’s degrees by 2009 and were employed in computer- and

FIGURE 2.10A FIGURE 2.10B Of 2003-04 Beginning Four-Year College Students Who Earned Percentage of High School Graduates Entering Four-Year Colleges, Bachelor’s Degrees, Percentage Persisting in the Fields They Entered Graduating in STEM Fields, and Employed in STEM Fields

STEM Major Non-STEM Major 80%

60% High School Graduates: 100% 40% 73% 71% 67% 66% 65% 64% 59% 57% 55% 47% Percentage 20% Graduate Four-Year College: 24%

0% Graduate in STEM Field: 4%

Health Enter College (as Freshman Social/ Physical Business Sciences Sciences Sciences Sciences Education Biological/

Behavioral at Four-Year College): 39% Computer/ Information Humanities Enter STEM Job One Year Engineering/ Mathematics Technologies Life Sciences After Graduation: 2.5%

SOURCES: Chen & Ho, 2013, Table 2; calculations by the authors. NOTE: Based on 2003-04 beginning postsecondary students who complete a STEM degree within six years. SOURCE: Salzman, Kuehn, & Lowell, 2013, Figure A.

FIGURE 2.10C Majors of Bachelor’s Degree Recipients in Selected STEM Occupations One Year After Graduation (with Percentage of All Employed Graduates Working in Occupation), 2009

Major Field of Study

STEM 77% Social Sciences, 17% Business6% Other Non-STEM Humanities, Education 2% NOTE: Percentages may not sum to totals because of Engineers and 83% 6% 8% rounding. Engineering Technicians (4%) 4% SOURCES: Woo, Green, & Matthews, 2013, Table 3.3; Physical and Life Scientists (2%) 85% 11% calculations by the authors. 2% Computer/Information Services/ 53% 20% 21% 6% Math-Related (5%) 2% 1% Nurses (4%) 96%

Occupation in 2009 1% Other Health Care Occupations (4%) 53% 27% 6% 15% 0% 20% 40% 60% 80% 100% Percentage of Graduates

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 43 Geographic Comparisons

College Enrollment and Attainment by State

The percentage of young people enrolling in college within a year after they were scheduled to graduate from high school in 2007-08 ranged from 29% in Nevada and 30% in the District of Columbia to 61% in Massachusetts and South Dakota.

––Over the years from 2008 to 2010, the percentage of adults ––In South Carolina in 2007-08, 70% of recent public high ages 25 and older with at least a bachelor’s degree ranged school graduates enrolled in college, compared to the national from 17% in West Virginia and 19% in Arkansas to 39% in average of 64%. However, because 38% did not graduate Massachusetts and 50% in the District of Columbia. from high school (compared to the national average of 25%), only 44% of all young people enrolled in college — less than ––Arkansas and Mississippi have college enrollment rates the national average of 48%. close to the national average of 48%, but they have only 19% and 20%, respectively, of adults with bachelor’s degrees, compared to the national average of 28%. ALSO IMPORTANT: ––The District of Columbia has the highest attainment rate in the ––About 78% of public high school 12th-graders graduate, compared to country, but the second lowest college enrollment rate — 30% 98% of those enrolled in private high schools. (NCES, 2012a, Table 125; of high school graduates. Broughman & Swain, 2013, Table 13)

FIGURE 2.11 Educational Attainment of Youth Scheduled to Graduate from High School in 2007-08

Percentage of All Youths Enrolling in Postsecondary Education Percentage Graduating from High School, but Not Enrolling in Postsecondary Education Percentage of Students Not Completing High School Diploma 100% 61% 61% 57% 56% 56% 55% 53% 53% 53% 53% 53% 52% 52% 51% 50% 49% 49% 49% 48% 48% 48% 48% 47% 47% 47% 46% 46% 46% 46% 46% 46% 45% 45% 45% 45% 44% 43% 43% 43% 42% 41% 39% 39% 37% 36% 36% 32% 30% 29% 60% 60% 44% 80%

60% 5% 40% Percentage

20% 21% 24% 24% 27% 27% 26% 31% 29% 30% 37% 30% 24% 18% 27% 25% 30% 29% 14% 33% 25% 25% 29% 24% 27% 29% 28% 25% 34% 29% 23% 31% 32% 20% 29% 22% 34% 31% 34% 19% 31% 46% 39% 32% 22% 28% 41% 3 34% 41% 38% 26% 28% 18% 16% 15% 14% 16% 18% 14% 16% 17% 10% 17% 23% 29% 21% 24% 20% 21% 36% 18% 26% 27% 24% 28% 25% 24% 25% 29% 20% 25% 31% 24% 23% 35% 26% 33% 21% 24% 22% 38% 26% 11% 18% 27% 36% 33% 20% 28% 29% 23% 31% 44% 44% 0% (57%) IL (67%) RI (64%) IA (62%) HI (59%) FL (49%) ID (66%) IN (67%) AL (61%) KY (68%) CT (48%) VT (57%) TX (65%) LA (65%) KS (66%) DE (60%) MI (58%) UT (51%) AZ (70%) SC (64%) PA (64%) PA (69%) VA (74%) NY (65%) NE (59%) WI (63%) AR (64%) US (63%) CO (65%) CA (62%) TN (56%) OK (47%) OR (46%) AK (53%) DC (72%) SD (71%) NJ (63%) OH (70%) GA (66%) NC (51%) NV (63%) MD (75%) MA (64%) NH (68%) ND (69%) MN (57%) ME (52%) MT (77%) MS (59%) WY (60%) MO (59%) WV (51%) WA (51%) WA (68%) NM STATE (Percentage of Public High School Graduates Enrolling in College)

50% Percentage of Adults Ages 25 and Older with at Least a Bachelor’s Degree, 2008–2010 40%

30%

20%

Percentage 10% 39% 26% 35% 32% 27% 36% 25% 28% 33% 26% 27% 34% 32% 30% 30% 36% 24% 20% 25% 23% 26% 19% 27% 28% 29% 36% 30% 31% 23% 22% 25% 17% 27% 20% 25% 26% 24% 22% 24% 29% 34% 28% 26% 21% 26% 24% 31% 26% 29% 28% 50% 22% 0% IL RI KY ID HI PA WI LA AL TX CT FL IA AZ UT DE SC KS VA IN OR DC OK AR CO CA TN NE NY NJ NV NC MA VT NH MN MI MT AK US SD WY GA OH MD MO WV WA ND NM ME MS State

NOTE: High school graduation rates are estimated based on data for public high schools. Actual graduation rates are slightly higher because 7% to 8% of students are enrolled in private high schools, which have higher graduation rates. Attainment data are estimates using three-year averages of 2008–2010 data. Use of a three-year average increases the sample size, thereby reducing the size of sampling errors and producing more stable estimates. Percentages may not sum to 100 because of rounding. SOURCES: National Center for Education Statistics, 2012a, Tables 113, 212; NCES, 2013a, Table 16; calculations by the authors.

44 EDUCATION PAYS 2013 Part 2: Distribution of Benefits Geographic Comparisons

International Comparisons: Public Spending on Higher Education Public funding constitutes a lower percentage of total funding for higher education in the United States than in most other countries.

––In 2010, 36% of funding for U.S. higher Norway to 56% in the United Kingdom students attend public institutions. In education institutions came from and 70% in Chile, compared to 48% in contrast, in 2011 28% of U.S. students public sources, while 48% came from the United States. attended private institutions. (NCES, 2013a, households and 16% came from other Table 221) private sources. ALSO IMPORTANT: ––In 2012-13, 63% of the annual average tuition and fees paid by households in the United ––In four OECD countries, higher ––In 2010, governments in the U.S. provided States was covered by grant aid from all education institutions received smaller an average of $12,112 per student in funding sources and federal tax benefits. (College percentages of their funding from to public higher education institutions — 6% Board, 2013) public sources than the U.S.: 22% in more than the OECD average of $11,382. Chile, 25% in the United Kingdom, (OECD 2013, Indicator B3.4) ––Considering room and board charges in 27% in Korea, and 34% in Japan. addition to tuition and fees, in 2012-13, ––Per-student public funding for public higher on average 36% of the total was covered ––In Finland and Norway, 96% of higher education institutions in 2010 ranged from by grants and federal tax benefits, 26% education funding was public. $4,248 in Chile and $4,680 in Argentina to was covered by loans through the federal $21,893 in Switzerland and $21,982 in Israel. government, and 38% by other resources. ––The percentages of higher education (OECD 2013, Indicator B3.4) (College Board, 2013) funding coming from households ranged ––In countries such as Switzerland, Norway, from 0% in Sweden and 3% in Austria and and Sweden, almost all postsecondary

FIGURE 2.12 Proportions of Expenditures on Higher Education Institutions from Public, Household, and Other Private Sources, 2010 Other Private Household Public 0% 0% 0% 0% 1% 1% 2% 6% 5% 100% 4% 0% 7% 7% 8% 8% 8% 8% 9% 8% 10% 12% 15% 13% 14% 16% 18% 4% 16% 5% 19% 24% 26% 3% 5%

80% 3% 23% 15% 24% 9% 34% 30% 18% 18% 60% 16% 11% 10% 23% 12% 20% 30% 39% 48% 52% 47% 56% 70%

40% Percentage

20% 96% 96% 95% 91% 91% 90% 88% 85% 82% 81% 79% 78% 75% 72% 71% 70% 70% 69% 68% 66% 57% 54% 46% 36% 34% 27% 25% 22%

0% Italy ($9,501) Chile ($6,794) Israel ($10,876) Spain ($13,300) Poland ($6,714) Korea ($11,218) Estonia ($5,715) Japan ($18,191) Iceland ($8,728) Mexico ($7,872) France ($14,699) Ireland ($15,911) Finland ($16,714) Austria ($15,007) Portugal ($9,498) Slovenia ($8,517) Canada ($24,704) Norway ($19,050) Belgium ($14,776) Sweden ($19,727) Australia ($16,020) Denmark ($18,432) Netherlands ($17,254) New Zealand ($10,418) United States ($25,576) Czech Republic ($7,338) Slovak Republic ($6,768) United Kingdom ($15,206) Country (with Estimated Total Expenditures on Higher Education Institutions per Student)

NOTE: “Other Private” sources include private businesses and nonprofit organizations, such as religious and charitable organizations and business and labor organizations. Money transferred to educational institutions from private sources, including public funding via subsidies to households, is included in the private funds total. Total expenditures per student are estimated based on the portion of total expenditures coming from public sources and the average public expenditure per student. Percentages may not sum to 100 because of rounding. SOURCES: OECD, 2013, Indicator 3.2b; calculations by the authors.

For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 45 References

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For detailed data, see: trends.collegeboard.org. EDUCATION PAYS 2013 47 ACKNOWLEDGMENTS

We are grateful to Charles Kurose for his invaluable input on this project and to Kathleen Little and Anne Sturtevant for their excellent editorial help. The publication would not have been possible without the cooperation and support of many people at the College Board, particularly Craig Jerald, Rohit Tandon, Silvia Ivanova, Marilyn Cushman, Jess Howell, Mike Hurwitz, Kathryn McGinley, Matea Pender, and Jonathan Smith. Barbara Kridl and her colleagues at RTI International provided expert graphic design work, as well as advice on content. Tom Snyder of the Department of Education provided valuable data.

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