Wednesday, July 16, 2014

College Graduates Don't Always Out-Earn High School Grads

Allison Schrager writes:
When we look at distribution of the college wage premium—how much more the lowest-, middle-, and highest-earning quartiles make relative to high-school grads, the picture of risk becomes clearer. At every level short of graduate school, there’s a not-insignificant chance that a successful high-school graduate will out-earn you. The chances [of being out earned by a person with just a high school degree] are greatest for college dropouts—the people who spend some time and money but don’t walk away with a degree...The figure below gives the 25th percentile, median, and 75th percentile of expected lifetime earnings for different education groups, starting at age 18 and proceeding to age 65 
The biggest risk of going to college is dropping out: An unfinished degree barely increases your earnings while costing money and time. Vocational two-year degrees  have a stronger positive effect on earning power than academic ones do. (Insert English major joke here.)

On average, college pays off, though not always. The wage premium comes with risk. For every degree short of a graduate degree, there’s a decent chance that a good high school graduate will out-earn you.

It is not surprising  that vocational degreed students are the ones most likely to do better than those holding a liberal arts college degree. Much of college curriculums these days is about politically correct nonsense that probably has a negative effect with regard to career earning power. Things are different for grad students, most likely, for two reasons. You have doctors, lawyers and physicists counted as grad students, and grad school for them is really vocational training that allows them not only to gain that training but often to climb over government instituted high occupational barriers to entry. The other reason grad school students are likely successful, the "non-vocational" training ones, is because, by getting into to grad school, it shows that the student likely has skills to game the current interventionist system to his advantage and this "skill"will work to his advantage once he leaves grad school.


1 comment:

  1. "It is not surprising that vocational degreed students are the ones most likely to do better than those holding a liberal arts college degree. "

    This statement isn't entirely honest. You should clarify - two year vocational degrees do better than two year liberal arts degrees. But saying "vocational students do better than those with liberal arts degrees" strongly implies that four-year liberal arts degrees (a BA) are doing worse than vocational students, and the chart indicates that they are not.