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). 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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