November 04, 2009
Gains from college
There's no doubt that getting a college degree is a big plus for most people in getting a good-paying job. But how have those gains held up in our turbulent economy?
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"Well, first of all, if you look at the benefits of getting a college degree right now, it's clearly beneficial. People with college degrees will make much more money - I think upwards of $1 million more in pay over their lifetimes - than will someone who stops at high school. But that said, what we have found this decade is that the gains from getting a college degree have actually fallen slightly. In fact, adjusted for inflation, those gains have fallen 11 percent from 2000 to 2008. And economists think there are two reasons. Number one, we've had two recessions this decade, one at the front end, one at the back end. And those recessions have really hit industries with many college grads - technology in 2001 and finance now. So that's hurt the pay that those college grads are getting. And secondly, the supply of college grads has been increasing rapidly. Whenever you have a market where supply increases relative to demand, you're going to put downward pressure, in this case on salaries. So the bottom line is certainly the gains - the financial gains - of going to college are big but perhaps not quite as big as they were eight years ago."
Posted by Dave at November 4, 2009 08:00 AM