December 31st, 2013
By Renee Haltom - Econ Focus, Federal Reserve Bank of Richmond
Countless studies over 50 years nearly all say the same thing: Going to college will probably make you richer. You don’t even need a fancy study to see it. It’s visible in the basic data: The median person with a bachelor’s degree earns about $48,000 per year, compared with $27,000 for a high school graduate, according to the U.S. Census Bureau. College grads also have lower unemployment — as of November, 3.4% for people with a bachelor’s degree or more, and 7.3% for people with only a high school diploma. But not everyone earns the median. Some college graduates become CEOs, while others can not even find jobs in their field of major.
Unequal outcomes from college have always been a fact of life, but there is evidence that the dispersion of outcomes has increased. Economists have known this to be true at the top of the ladder for some time. In the late 1970s, the most fortunate 10 percent of graduates made around $963,000 more in their lifetimes than the median, but they now make $2.3 million more, adjusted for inflation, according to a recent study by Christopher Avery at the Harvard University Kennedy School of Government and Sarah Turner at the University of Virginia. And according to new evidence, there is now more variance on the downside too.
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