How Does a College Degree Improve Graduates' Employment

How does a college degree improve graduates’ employment and earnings potential?

The evidence that a college degree significantly improves one’s employment prospects and earnings potential is Annual Median Earnings overwhelming. Bachelor’s degree holders are half as likely to for Workers Aged 22–27 be unemployed as their peers who only have a high school degree and they make $1 million in additional earnings on average over their lifetime.1,2 $43,000

BOLSTERED PROSPECTS Sixty percent of bachelor’s degrees in the United States are $25,500 awarded by public institutions. College-educated workers enjoy a substantial earnings premium. On an annual basis, bachelor’s degree holders earn about $32,000 more than those whose highest degree is a high school diploma.3 The HIGH SCHOOL BACHELOR’S DEGREE HOLDERS DEGREE HOLDERS earnings gap between college graduates and those with less education continues to widen. Today, Millennials with a high school diploma earn 62 percent of what the typical college graduate earns.4 In 2016, recent graduates’ income reached its highest level in over a decade—a median of $43,000 a year for bachelor’s degree holders aged 22–27. For high school graduates the same age, median earnings are $25,000 a year.5 Recent college graduates also weathered the Great Recession better than their peers 3.5x with a high school diploma. When unemployment reached its peak in 2010, recent LOWER POVERTY RATE college graduates experienced an unemployment rate of 6.9 percent, compared with a FOR BACHELOR’S DEGREE jobless rate of 15.8 percent for all young workers. Today, the jobless rate for bachelor’s HOLDERS VERSUS THOSE degree holders is just 2.5 percent.6 And the incidence of poverty among bachelor’s WITH ONLY A HIGH degree holders is 3.5 times lower than it is for those who hold high school degrees.7 SCHOOL DEGREE

A college education is expected to become even more valuable. Some 99 percent of jobs created since the recession went to individuals with at least some postsecondary education.8

www.aplu.org/PublicUValues @APLU_News ADDITIONAL BENEFITS TO GRADUATES BACHELOR’S DEGREE HOLDERS ARE Of course, a college education is about more than just securing a job and a steady income. Consider health and safety, prerequisites for leading a fulfilling life. Bachelor’s degree holders are 47 percent more likely to have health insurance provided through their job and their 47% employers contribute 74 percent more to their health coverage. Life MORE LIKELY TO HAVE HEALTH INSURANCE expectancy is also longer for those who attend college. Studies suggest THROUGH THEIR JOBS THAN THOSE that those who have attended at least some college can expect to live HOLDING HIGH SCHOOL DEGREES seven years longer than their peers with no postsecondary education.3 Weathering Economic Downturns: 15.7% Jobless Rates at the Peak of the Great Recession 9.6% AND THEIR EMPLOYERS CONTRIBUTE 6.8% 5% YOUNG WORKERS YOUNG WITH HIGH ALL BACHELOR’S ALL BACHELOR’S SCHOOL DEGREE WORKERS DEGREE HOLDERS DEGREE HOLDERS 74% MORE TO THEIR HEALTH COVERAGE.

Return on Investment: HIGH SCHOOL DIPLOMA $1,304,000 Lifetime Earnings by Level of Education SOME COLLEGE $1,547,000

ASSOCIATE’S DEGREE $1,727,000

BACHELOR’S DEGREE $2,268,000

ADVANCED DEGREE $2,671,000

Source: Carnevale, Rose and Cheah, “The College Payoff,” Georgetown University Center on Education and the Workforce.

1. Abel and Deitz, “Do the Benefits of College Still Outweigh the Costs,” Current Issues in Economics and Finance, 2014. 2. Timiraos and Zumbrun “The July Jobs Report in 15 Charts,” Wall Street Journal, 2016. 3. Trostel, Lumina Foundation, “It’s Not Just the Money,” 2015. 4. Pew Research Center, The Rising Cost of Not Going to College, 2014. 5. Zumbrun, “Income for Recent Graduates the Highest in Over a Decade,” Wall Street Journal. 6. “The Labor Market for Recent College Graduates,” The Federal Reserve Bank of New York.” 7. Trostel, Lumina Foundation, “It’s Not Just the Money,” 2015. 8. Carnevale, Jayasundera & Gulish, “America’s Divided Recovery: College Haves and Have Nots,” 2016. www.aplu.org/PublicUValues @APLU_News