The Rising Cost of Not Going to College

The Pew Research Center released a report on Tuesday that will undoubtedly inform the debate over the value of higher education. Those questioning the decision to pursue a college degree should pay close attention to the analysis put forth in the following article.

Chapter 1: Education and Economic Outcomes Among the Young

As college costs have increased in recent decades, so, too, have many of the economic rewards for getting a four-year degree as well as the penalties for not doing so, according to a new Pew Research Center analysis of U.S. Census Bureau data.

The analysis, which focuses on young adults in the first phase of their working lives, finds that the earnings gap by education level among 25- to 32-year-olds has widened significantly over the past half century. Those with a bachelor’s degree or higher are earning more in inflation-adjusted dollars than their similarly educated counterparts from prior generations did at the same age, while those with a high school diploma or some college are earning less.

As a result of these shifts, young adults today have more unequal earnings between education levels than their same-aged peers did in earlier times—mirroring the broader increase in income inequality that has become one of the defining features of American life. This Pew Research analysis focuses primarily on earnings, but it also tracks other key measures of economic well-being, including employment characteristics, unemployment rates, duration of unemployment, poverty, wealth, personal income and household income. With some minor variations, the overall story is the same across all of these measures: the gap in economic well-being by education level has grown over time.

The analysis produces a mixed picture, however, when it compares the overall economic well-being of all of today’s young adults with that of their same-aged counterparts in earlier times. While today’s young adults are doing better on some measures (earnings, adjusted median household income), they are doing worse on others (unemployment, poverty, wealth and median personal income).

This overall lack of economic progress from one generation of young adults to the next is notable in view of the fact that today’s young adults are the best-educated generation in history: Some 34% of 25- to 32-year-old Millennials have a bachelor’s degree or more, compared with 25% of Gen Xers, 24% of Baby Boomers and 13% of the Silent generation when they were the same age as today’s Millennials.

The remainder of this chapter provides a comprehensive examination of the labor market and economic outcomes associated with attainment of a bachelor’s degree among today’s Millennial adults. First it compares outcomes for Millennials who have at least a bachelor’s degree to those of Millennials with some college education (but not a bachelor’s degree) and Millennials with a high school diploma but no further formal education. It also compares the economic outcomes of today’s young adults with those of earlier generations when they were the same age that Millennials are now.

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