College – worth the cost?
Whether you’re interested in pharmacy technology or getting a vet tech degree, research suggests a college education is a surefire way to improve your earnings over the long term. A multitude of surveys, student testimonies and articles examining the job market for college graduates has caused shock waves across various media, but the general consensus throughout much research appears to be that a college degree will certainly pay off over the course of a career. Though certain qualifiers apply, i.e., what school you attend, the degree program selected and the amount of time it takes to complete a degree, several studies indicate that a degree gives graduates enormous dividends by the time they reach retirement age.
Calculating long term career earnings
Generally, studies analyzing the potential financial benefits of a college degree begin by calculating the average cost of tuition plus the amount of time spent in school versus work. This provides a rough estimate for the total cost of a college education. A study by the Federal Reserve Bank of San Francisco found that the average college graduate can recoup the costs of schooling by age 40, and that after it is paid off, college grads make an average $800,000 more than the average high school graduate by the age of retirement.1 Another study, conducted by MIT economics professor David Autor, found that for full-time, year-round workers, the average earnings gap between median high school and college graduates is $34,969 for men and $23,280 for women.2
In a Q&A with MIT News Autor jokes, “If you had to give a person a single piece of economic advice, it would not be: Act like Gatsby and try to get into the top 1 percent. It would be: Go get a college education at a decent school.”3
While the main focus of Autor’s study is inequality among the U.S. population, excluding the richest 1 percent, the takeaway is that a college degree not only still has educational value, but long-term monetary value as well.
A study conducted by Pew Research Center provides different numbers but confirms the overall trends. Its study found that median millennial college graduates (ages 25-32) average $17,500 more per year than their high school graduate counterparts.4 While the numbers across these studies vary, partially due to differing variable groups and research methods, all of the calculations confirm significantly more career earnings for those who obtain a college degree.
Why education benefits long term career earnings
In the short term, it’s easy to question if school is the smartest financial option due to the amount of time it requires to achieve a degree and the cost of tuition. Many employers are seeking out applicants with more advanced skills, and a college education is an easy way to help identify them. Pew Research additionally found that a larger percentage of college graduates felt prepared for their roles in the working world than those who only graduated high school.5 This feeling of preparedness allows most college graduates to enter the workforce with the ability to quickly learn new skills and be productive. Many economists attribute worker earnings largely to productivity,6 so as college graduates enter the workforce confident of their abilities, their productivity increases.
The rise of a fast-paced, technology-adept workforce only exacerbates the need for skilled labor. A continued education allows students to enhance their concrete skills, learn the specifics relevant to their field, develop complex problem-solving abilities and gain digital literacy. For people seeking specialized degrees in areas such as medical, dental or veterinary fields, college is a necessity to enter the workforce and advance your career.
1 “Is It Still Worth Going to College?” Mary C. Daly and Leila Bengali. FRBSF Economic Letter. May 5, 2014. http://www.frbsf.org/economic-research/publications/economic-letter/2014/may/is-college-worth-it-education-tuition-wages/
2 “Skills, education, and the rise of earnings inequality among the ‘other 99 percent'” David H. Autor. Science May 23, 2014: Vol. 344 no. 6186 pp. 843-851 http://www.sciencemag.org/content/344/6186/843.full
3 “Q&A: David Autor on inequality among the ’99 percent'” Peter Dizikes | MIT News Office May 22, 2014 http://newsoffice.mit.edu/2014/qa-david-autor-inequality-among-99-percent-0522
4 “The Rising Cost of Not Going to College” Pew Research Social & Demographic Trends February 11, 2014 http://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of-not-going-to-college/
5 “The Rising Cost of Not Going to College” Pew Research Social & Demographic Trends February 11, 2014 http://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of-not-going-to-college/
6“Skills, education, and the rise of earnings inequality among the ‘other 99 percent'” David H. Autor. Science May 23 2014: Vol. 344 no. 6186 pp. 843-851 http://www.sciencemag.org/content/344/6186/843.full