The college premium — the average difference in lifetime earnings of college graduates compared to high-school graduates — is a lot less than previous estimates, reports the Wall Street Journal. Often quoted at $1 million or $800,000 it’s more like $279,893, estimates Mark Schneider, a vice president of the American Institutes for Research, a nonprofit research organization. Even graduates of elite institutions don’t earn a $1 million premium, Schneider says.
(Estimates) don’t take into account deductions from income taxes or breaks in employment. Nor do they factor in debt, particularly student debt loads, which have ballooned for both public and private colleges in recent years.
The premium number is meaningless unless it’s broken down by field of study and student characteristics, responds Andrew J. Coulson at Cato @ Liberty.
What’s the premium difference, for instance, between workers who majored in engineering, chemistry, computer science, mathematics, economics, etc., compared to those who majored in communications, art history, social work, multicultural studies, etc.? A similar breakdown of interest would be by SAT score.
College costs have been growing faster than inflation year after year; salaries aren’t growing that fast in most careers. At some point, the premium for C+ students and “fuzzy studies” majors will reach zero.