Over the past few years, there has been a growing concern that high education costs combined with uncertain employment prospects for recent graduates have created a situation where a college degree is no longer worth the cost. The Research Bunker Blog addressed this topic in a post last year about fiscal challenges in higher education. Our main observation at the time was while the ROI for a degree might not be what it once was, there was still undeniably a need for a college educated workforce. Findings from a recent study by the Pew Research Center have reinforced that idea, and suggest that although the cost of going to college is considerable, the cost of not going is increasingly severe.
The study examined the differences between “Millennial” (age 25 to 32) college graduates and their peers with less educational attainment. It also incorporated an analysis that tracked the results of how past generations — “Silents” (born 1928 to 1945), “Early Boomers” (born 1945 to 1954) “Late Boomers” (born 1955 to 1964) and “Gen X” (born 1965 to 1980) — were faring at comparable points in their career cycles.
A summary of the research states, “On virtually every measure of economic well-being and career attainment—from personal earnings to job satisfaction to the share employed full time—young college graduates are outperforming their peers with less education.” While that isn’t particularly surprising, one eye-opening finding was that the income gap between graduates and non-graduates has widened considerably over the past several decades. A graph contained in Pew’s report tells the story: While adjusted incomes (in 2012 dollars) for college graduates have risen modestly since 1986, they have actually declined for those with less educational attainment.
Income is only one of several metrics where the economic gap between college graduates and non-graduates is increasing. Some other examples from the summary:
- Twenty-two percent of Millennials with only a high school diploma are living in poverty, compared with 6% of college-educated Millennials. In 1979, only 7% of comparably aged Early Boomer high school graduates lived in poverty, compared to 3% of college graduates.
- The unemployment rate for Millennials with only a high school diploma is 12.2% compared to only 3.8% for college graduates in the same age group, and almost three times the unemployment rate of comparably aged high school graduates in 1965.
- It takes longer for Millennial high school graduates to find a job compared to Millennial college grads (31 weeks vs. 27 weeks). By contrast, in 1979, high school educated Early Boomers only needed 12 weeks.
The data paints a fairly stark picture of the future prospects for American workers with lower levels of educational attainment. While that is a public policy concern in its own right, the obvious takeaway of this study from a higher education perspective is that colleges and universities have a very compelling story to tell when they counter the critics who question the value of a degree. Institutions of higher learning can and should reinforce to prospective students that, now more than ever, they are key to accessing economic opportunity in the United States.