May 16, 2011

Lifetime Earnings of College Graduates

What is the financial payoff to earning a college degree, and how does it differ by field of study? A new Pew Research Center analysis, using Census Bureau data, estimates that the typical adult with a bachelor’s degree (but no further education) will earn $1.42 million over a 40-year career, compared with $770,000 for a typical high school graduate. That $650,000 difference narrows somewhat, to $550,000, according to the analysis, after factoring in the expenses of going to college and the four years of potential earnings that college graduates give up while they are in school.

The analysis by Richard Fry, a senior researcher, uses data from the American Community Survey, which includes a field-of-study question for recipients of bachelor’s degrees. Based on those numbers, the real gains of a college education vary widely by broad field of undergraduate major: “The added earnings from most bachelor’s degrees seem to exceed the typical costs to acquire them, but bachelor’s degrees in some fields of study seem to be on the bubble.” The analysis updates and expands on a 2002 Census Bureau report, “The Big Payoff.” Fry’s education-payoff analysis is included as a chapter in a newly released Pew Research Center report — “Is College Worth It?” — that surveyed the public and college presidents on the value, quality and mission of higher education.