It’s widely accepted that earning a bachelor’s degree will boost a person’s earnings potential over a lifetime. But how quickly does it pay off?
A new Washington study shows that in the first two years after graduation, students who earned a bachelor’s degree made about 20 percent more than those with only a high-school diploma.
Perhaps not surprisingly, women fared worse than men in the study. Two years after graduation, a woman with a bachelor’s degree only made about as much as a man with a high-school diploma.
The report comes from the state Education Research and Data Center, which keeps data on academic performance from pre-kindergarten through graduate school.
The study didn’t take into account the cost of paying for college. It assumed that college students forgo as much as $55,000 in lost earnings while they are in college. They make up those lost earnings a few years after graduation.
Seven years after graduating from high school, women who hold a bachelor’s degree earn about $5,400 more per year than women with only a high-school diploma. Men with bachelor’s degrees earn about $6,200 more than their male classmates with just a high-school diploma.
Some reports have placed a much higher value on a college education; for example, a Pew Research Report, which used national data and compared whole populations, found that bachelor’s degree-holders made 62 percent more.
ERDC researcher Greg Weeks characterized the ERDC report as a conservative look at the value of a degree; not only did it exclude students who went to out-of-state colleges and in-state private colleges, it also excluded the self-employed and those who left the state for a job, he said. Those groups were omitted because there was no data available for them. “You could argue that some of the best-and-brightest find jobs out of state,” he said, but the ERDC doesn’t have access to out-of-state earnings, and so couldn’t include those graduates in the analysis.
Weeks said researchers also were careful to select high school students who closely matched the college graduates because they had similar grade-point averages coming out of high school and similar family incomes. That helped control for student ability, among other things.
Why did women with bachelor’s degrees only do as well as men with high-school degrees? Weeks said he wasn’t sure, but it could be because men with high-school degrees often go into construction trades, which pay well.
Washington is one of only about a half-dozen states in the country with enough detailed information about high school performance and choices after graduation to do analyses such as these, Weeks said. For this study, researchers looked at students in the high-school graduating classes of 2005 to 2007 — students who are now about 25 to 27 years old.
In the coming years, ERDC will study how graduates of community colleges fare after graduation, and whether science, technology, engineering and math (STEM) majors do better than non-STEM majors, he said.