Do the Benefits of College Still Outweigh the Costs?
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Do the Benefits of College Still Outweigh the Costs?

Jaison R. Abel and Richard Deitz
Federal Reserve Bank of New York, 2014
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Recommendation

Years ago, having a university degree almost always meant earning more money. Today, an unaccommodating job market for many new college graduates and soaring tuition fees lead some to wonder if a sheepskin is still worth it. This illuminating analysis from the Federal Reserve Bank of New York provides some answers but also poses new questions. getAbstract recommends this report to parents, educators, students and anyone weighing the potential financial benefits of a higher education against its costs.

Summary

From 1970 to 2013 in the US, an individual holding a bachelor’s degree earned approximately $64,500 annually, compared to $50,000 for those with an associate’s degree and $41,000 for high school graduates. Yet the “college wage premium” has fluctuated over the years. Beginning in the 1980s and through the 1990s, the technological revolution and a demand for skilled workers meant salaries for college graduates increased faster than those for high school graduates. But between 2001 and 2013, average pay fell 10.3% for those with a bachelor’s degree, 11.1% for those with an associate’s degree and 7.6% ...

About the Authors

Jaison R. Abel is a senior economist at the Federal Reserve Bank of New York, where Richard Deitz is an assistant vice president.

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