Do the Benefits of College Still Outweigh the Costs?

Abstract

In recent years, students have been paying more to attend college and earning less upon graduation — trends that have led many observers to question whether a college education remains a good investment. However, an analysis of the economic returns to college since the 1970s demonstrates that the benefits of both a bachelor’s degree and an associate’s degree still tend to outweigh the costs, with both degrees earning a return of about 15 percent over the past decade. The return has remained high in spite of rising tuition and falling earnings because the wages of those without a college degree have also been falling, keeping the college wage premium near an all-time high while reducing the opportunity cost of going to school.

Keywords: college education, economic return

JEL Classification: I20, J20, J24, J30