By The College Board
NEW YORK — Individuals with higher education levels earn more, pay more taxes, and are more likely than others to be employed and to have job benefits such as retirement and health insurance. Adults with more education are also more likely to move up the socioeconomic ladder and less likely to rely on public assistance, according to Education Pays 2016, the latest report from the College Board’s Trends in Higher Education series.
Updated triennially since 2004, Education Pays: The Benefits of Higher Education for Individuals and Society documents differences in the earnings and employment patterns of U.S. adults with different levels of education.
The report also establishes a correlation between education and health outcomes, community involvement, and indicators of the well-being of the next generation. In addition to documenting median earnings by education level, this year’s report also includes data on variation in earnings by different characteristics such as gender, race/ethnicity, occupation, college major, and institutional sector.
“Although obtaining a college degree can mean forgone wages during a time when they are also paying tuition, by age 34 the average bachelor’s degree recipient will have recouped those costs,” explains Jennifer Ma, senior policy research scientist at the College Board and a coauthor of the report. “A college education is an investment that pays dividends over the course of a lifetime — even for students who accumulate some debt to obtain a degree.”
Although college enrollment rates continue to rise, the patterns are uneven across demographic groups. Among students with similar high school math test scores, those from wealthier families are much more likely to enroll in college immediately after high school, but the enrollment gaps by socioeconomic background are largest for those who are least academically prepared. Among those who enroll in college, students from disadvantaged backgrounds are less likely to begin at a public or private nonprofit four-year institution than others.
“Given the high payoffs of postsecondary education to both individuals and society as a whole, it is important that we increase college opportunity for all who can benefit and also improve completion rates,” notes Jessica Howell, executive director of policy research at the College Board. “We’ve designed our Access to Opportunity efforts to break down the barriers that prevent students from applying to and enrolling in college. Our goal is to help all students recognize and make the most of the opportunities they’ve earned.”
Key findings from the report:
Participation and Success in Higher Education
- In 2015, 82% of high school graduates from the highest-income quintile enrolled immediately in college, compared with 62% of those from the middle-income quintile and 58% of those from the lowest-income quintile. (Figure 1.1)
- The gaps in college enrollment rates between black and Hispanic recent high school graduates and their white peers were 11 percentage points in 2005. By 2015, these gaps had fallen to 8 percentage points for black high school graduates and 5 percentage points for Hispanic high school graduates. (Figure 1.2A)
- In 2015, the percentage of female adults age 25 to 29 who had completed at least a bachelor’s degree was 24%, 18%, and 45% for blacks, Hispanics, and whites, respectively. The percentage of male adults age 25 to 29 who had completed at least a bachelor’s degree was 19%, 13%, and 38% for blacks, Hispanics, and whites, respectively. (Figure 1.6)
- The percentage of the high school class of 2011-12 enrolling in college within a year ranged from 31% in the District of Columbia and 32% in Nevada to 61% in Massachusetts and Connecticut and 62% in Minnesota. (Figure 1.7)
Earnings and Other Economic Benefits
- In 2015, median earnings of bachelor’s degree recipients age 25 and older with no advanced degree working full time were $24,600 (67%) higher than those of high school graduates. Bachelor’s degree recipients paid an estimated $6,900 (91%) more in taxes and took home $17,700 (61%) more in after-tax income than high school graduates. (Figure 2.1)
- In 2015, among adults between the ages of 25 and 64, 68% of high school graduates, 72% of those with some college but no degree, 77% of those with an associate degree, and 83% of those with a bachelor’s degree or higher were employed. (Figure 2.11)
- In 2015, when the unemployment rate for 25- to 34-year-olds with at least a bachelor’s degree was 2.6%, 8.1% of high school graduates in this age range were unemployed. (Figure 2.12B)
- Among high school sophomores whose parents were in the lowest-income group in 2001, 21% of those who earned at least a bachelor’s degree, 17% of those with an associate degree, and 13% of those with only a high school diploma had reached the highest-income quartile themselves 10 years later. (Figure 2.15)
- In 2015, 4% of bachelor’s degree recipients age 25 and older lived in poverty, compared with 13% of high school graduates. (Figure 2.16A)
Variation in Earnings
- In 2015, the percentage of full-time year-round workers age 35 to 44 earning $100,000 or more ranged from 2% of those without a high school diploma and 5% of high school graduates to 25% of those whose highest attainment was a bachelor’s degree and 38% of advanced degree holders. (Figure 2.3)
- Between 2013 and 2014, median earnings for early career bachelor’s degree recipients ranged from $30,000 a year for early childhood education and psychology majors to $54,000 for computer science majors, a $24,000 range. By mid-career, the range in median earnings grew to $46,000 a year. (Figure 2.9)
- Institutional median earnings vary by sector. The typical four-year college’s median earnings of 2001-02 and 2002-03 federal student aid recipients ranged from $33,600 at for-profit institutions to $39,800 at public institutions and $40,500 at private nonprofit institutions. (Figure 2.10A)
Health, Volunteerism, and Civic Engagement
- In 2014, smoking rates were 8% and 26% for four-year college graduates and high school graduates, respectively. Within each education level, males are more likely to smoke than females. (Figures 2.18A and 2.18B)
- In 2014, 69% of 25- to 34-year-olds with at least a bachelor’s degree and 45% of high school graduates reported exercising vigorously at least once a week. (Figure 2.19A)
- In 2015, 39% of adult bachelor’s degree recipients and 16% of high school graduates volunteered. (Figure 2.22A)
- Across every age group, adults with higher levels of education are more likely to vote than those with lower levels of education. (Figure 2.23A)
- In the 2014 midterm election, the voting rate of 25- to 44-year-olds with at least a bachelor’s degree (45%) was more than twice as high as the voting rate of high school graduates (20%) in the same age group. (Figure 2.23A)
To view the complete report, visit Education Pays 2016.
The Trends in Higher Education series provides insight into trends in college pricing and financial aid. A college education is critical to one’s long-term financial security, yet many students and families face real financial barriers to college enrollment and success. The data on college prices and student aid included in these reports create a context for evaluating public policies designed to increase educational opportunities.
For more information about the College Board’s work, please visit collegeboard.org.
Original release date: January 9, 2017.