Do the Benefits of College Still Outweigh the Costs?

12 Pages Posted: 10 Aug 2014

See all articles by Jaison R. Abel

Jaison R. Abel

Federal Reserve Bank of New York

Richard Deitz

Federal Reserve Bank of New York - Research Group

Date Written: August 1, 2014

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

Suggested Citation

Abel, Jaison R. and Deitz, Richard, Do the Benefits of College Still Outweigh the Costs? (August 1, 2014). Current Issues in Economics and Finance, Vol. 20, No. 3, 2014. Available at SSRN: https://ssrn.com/abstract=2477864

Jaison R. Abel

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Richard Deitz (Contact Author)

Federal Reserve Bank of New York - Research Group ( email )

33 Liberty Street
New York, NY 10045
United States

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