What's the Value of a College Degree?

ROI on your B.A.

Majors matter. "What's It Worth? The Economic Value of College Majors," a 2011 study by Georgetown University's Center on Education and the Workforce, noted that the average graduate with a petroleum-engineering degree earns four times as much as the average counseling psychology major. Of the 10 most popular majors, computer science tops the earnings list with a $75,000 median salary; at the bottom is elementary education, at $40,000.

"When you sign up for your major, they ought to give you a little pamphlet that tells you what happened to people over in that major. I think that given the price of these things, you ought to get a prospectus when you buy in," says Anthony Carnevale, the Georgetown study's lead author. "But most young people go to college in order to graduate. They do what interests them—they don't think at all about how it relates to a career."

What school you go to matters, but only sometimes. "The selective schools are the best places to get a liberal arts degree, and the best places to go if you want to get a graduate degree," Carnevale says. "If you go to Harvard to become a schoolteacher, you won't make any more than someone who went to UDC in Washington." The main advantage of going to an expensive, selective, high-ranking school, say researchers: You have a much higher chance of graduating in four years, though whether that's a function of how great the schools are or of how great you are for being accepted there is an open question.

Past returns are no guarantee of future performance. According to EPI's figures, which control for age, gender, and race, the value of a college diploma versus a high school certificate rose steadily through the '80s and '90s—but since then, Mishel says, "It's grown bupkes."

That's overstating things just a bit, as the education premium actually inched upwards by a percentage point or two from 2001 to 2011, per EPI's numbers. Still, even these modest gains are less because the average college graduate is making tons of money—their earnings actually fell over that decade—than because the earning power of high school graduates has been declining for decades, especially for men. Which leads us to . . .

If college is no sure thing, not going to college is even worse. Just about all the studies agree on one thing: No matter how dicey things look for college graduates, things are so dismal right now for people with only high school diplomas, you better get into whatever lifeboat you can, even if it leaves you $100,000 in debt.

"The underbelly of all of this," says Hamilton Project director Michael Greenstone, "is this differential between college and no college is a function of two things: One is the level of how much you get paid for going to college. But it's also a function of what you get paid for only having a high school credential." And that has plummeted, especially for men: According to figures compiled by Brookings, while the inflation-adjusted median earnings of full-time male workers with college degrees dipped 2 percent from 1969 to 2009, for those with high school diplomas, it sunk 26 percent.

The culprit is easy to pinpoint: As manufacturing jobs have fled overseas, the few low-skill jobs that remain in the U.S. increasingly sport developing-nation wages. "The decline in earnings for people with less than college in real terms is really astonishing over the last 30 or 40 years," Greenstone says. "It's just very challenging to have a middle-class lifestyle without having a college degree or more."

It certainly puts those inevitable tales of overeducated baristas in a different light when you consider all the undereducated baristas who are now stuck in the unemployment lines. If you graduate from college today, Baum acknowledges, "you might work at Starbucks for a year or two until the economy recovers." But even if recent college graduates are facing crappier work prospects than their older siblings, she predicts, "they're going to be fine in 10 years. Whereas the people who just graduated high school? They're not going to be so fine."

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