By Jeff Wallace, Ph.D., Research Professor
Sparks Bureau of Business & Economic Research, The University of Memphis
The most important impact of a university occurs from the changes it makes in the lives of its students. Because of their education, college graduates are more likely to be employed and earn higher incomes than are non-graduates. Nearly all people with a college degree are employed, with only a small percentage unemployed in any economic period. Unemployment rates rise for everyone in a deep recession, but college graduates always have an advantage even in weak labor markets.
Chart 1, below, presents the latest data from the Current Population Survey on unemployment rates and median earnings by educational attainment. As shown, the probability of being employed rises with each incremental increase in educational attainment. Over 97.0 percent of college graduates with at least a bachelor’s degree were employed in 2017. In contrast, just over 93.0 percent of individuals with less than a high school diploma were employed during the same period.
Additionally, weekly median earnings also rise with an individual’s education level, going from $712 per week ($35,600 per year) for those with a high school diploma to $1,173 per week ($58,650 per year) for those with a bachelor’s degree. Of note, while a doctoral degree may be an educational step up from a professional degree, weekly median earnings for those persons with a doctoral degree are slightly less than the earnings for professionals.
Educational attainment also has a strong influence on worklife expectancy and worklife earnings. Because of longer expected work lives (Chart 2) and due to higher starting salaries and wages, college graduates at all levels will earn substantially more over their work life than will persons with less than a college degree. Over a work life, a college graduate who has obtained a bachelor’s degree will earn $3.3 million or approximately $1.6 million more than will a high school graduate (Chart 3). An advanced degree generates worklife earnings estimates of $4.3 to $5.9 million for graduates with master’s, Ph.D., and professional degrees. The evidence is clear: the best way to a longer work life and higher earnings is a higher education.