Study: College Wage Premium at a Record High

Study: College Wage Premium at a Record High

A new analysis finds that the wage gap between high school and college graduates in the US is higher than it has been since economists began measuring it over 40 years ago, the Associated Press reports:

College graduates, on average, earned 56 percent more than high school grads in 2015, according to data compiled by the Economic Policy Institute. That was up from 51 percent in 1999 and is the largest such gap in EPI’s figures dating to 1973. Since the Great Recession ended in 2009, college-educated workers have captured most of the new jobs and enjoyed pay gains. Non-college grads, by contrast, have faced dwindling job opportunities and an overall 3 percent decline in income, EPI’s data shows. …

The dominance of college graduates in the economy is, if anything, accelerating. Last year, for the first time, a larger proportion of workers were college grads (36 percent) than high school-only grads (34 percent), Carnevale’s research found. The number of employed college grads has risen 21 percent since the recession began in December 2007, while the number of employed people with only a high school degree has dropped nearly 8 percent. Behind the trend is a greater demand for educated workers, and the retirement of older Americans, who are more likely to be high school-only graduates.

These figures may give pause to those who in recent years have questioned whether a college degree is still worth earning or whether expanding the ranks of the college-educated population is an effective generator of economic growth. They certainly underline the growing realization that a college degree is a must-have in the contemporary job market.

The college/non-college wage gap was one of the points Federal Reserve Chair Janet Yellen highlighted in her commencement address at the University of Baltimore last month, in which she congratulated graduates on joining the workforce at an auspicious time. Recent college graduates in the US are enjoying a strong job market for educated candidates, with some of the best job prospects and starting salaries in about a decade.