Saturday, August 6, 2011

College Payoff: Education, Occupation, and Lifetime Earnings

How much money people make has a lot to do with how educated they are, but sometimes less-educated people earn more.

This spring, Georgetown University's Center on Education and the Workforce injected some nuance into the debate over what a college degree is worth when it released a report showing how what people study in college affects their earnings. That report, based on the center's analysis of a trove of new data from the U.S. Census Bureau, compared workers whose highest degree was a bachelor's. Now the center is following up with a new report that works to untangle the relationship between earnings and education more broadly.

The new report, "The College Payoff: Education, Occupation, Lifetime Earnings," released Thursday, is also based on data from the bureau's American Community Survey. In this case, the researchers calculated a lifetime-earnings figure for full-time, full-year workers with various levels of education, from less than high school to doctoral and professional degrees.

Unsurprisingly, they found that median lifetime earnings rise with education level: The typical worker with less than a high-school diploma earns $973,000 over a career, in 2009 dollars, while a worker with a professional degree (mainly in law or medicine) earns $3.6-million. But that is not the whole story. "There was a time when the differences by education level were really much more powerful," says Anthony P. Carnevale, director of the center and lead author of the report. Education level still matters. But what really intrigued the researchers was the diversity of experiences underneath that general pattern.

For example, while the median lifetime earnings of bachelor's degree holders (about $2.3-million) are higher than those of associate-degree holders (about $1.7-million), 28.2 percent of those whose highest degree is an associate earn as much as or more than does the typical bachelor's holder (see interactive chart).

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