Education Pays - The College Board

distributed. We are releasing this report separately from the. Trends reports, with the hope that the evidence provided here will help to generate conversations, policy proposals, and ..... According to the U.S. Census data, the average 2005 earnings for four-year college graduates between ages 25 and 34 with no advanced ...
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Trends in Higher Education Series

Education Pays The Benefits of Higher Education for Individuals and Society Sandy Baum and Jennifer Ma

2007

Executive Summary Students who attend institutions of higher education obtain a wide range of personal, financial, and other lifelong benefits; likewise, taxpayers and society as a whole derive a multitude of direct and indirect benefits when citizens have access to postsecondary education. Accordingly, uneven rates of participation in higher education across different segments of U.S. society should be a matter of urgent interest not only to the individuals directly affected, but also to public policymakers at the federal, state, and local levels. This report presents detailed evidence of the private and public benefits of higher education. It also sheds light on the distribution of these benefits by examining both the progress and the persistent disparities in participation in postsecondary education. The benefits of higher education for individuals and for society as a whole are both monetary and nonmonetary.

Benefits to Individuals • There is a positive correlation between higher levels of education and higher earnings for all racial/ethnic groups and for both men and women. • In addition to earning higher wages, college graduates are more likely than others to enjoy employer-provided health insurance and pension benefits. • The income gap between high school graduates and college graduates has increased significantly over time. The earnings benefit is large enough for the average college graduate to recoup both earnings forgone during the college years and the cost of full tuition and fees in a relatively short period of time. • The considerable nonmonetary rewards of a college education include better health and greater opportunities for the next generation. • Any college experience produces a measurable return when compared with none, but the benefits of completing a bachelor’s degree or higher are particularly large.

Societal Benefits • Higher levels of education correspond to lower unemployment and poverty rates. So, in addition to contributing more to tax revenues than others do, adults with higher levels of education are less likely to depend on social safety-net programs, generating decreased demand on public budgets. • The earnings of workers with lower education levels are positively affected by the presence of college graduates in the workforce. • College graduates have lower smoking rates, more positive perceptions of personal health, and healthier lifestyles than individuals who did not graduate from college.

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Trends in Higher Education Series

• Higher levels of education are correlated with higher levels of civic participation, including volunteer work, voting, and blood donation, as well as with greater levels of openness to the opinions of others. Given the extent of higher education’s benefits to society, gaps in access to college are matters of great significance to the country as a whole. This report shows that despite the progress we have made in improving educational opportunities, participation in higher education differs significantly by family income, parent education level, and other demographic characteristics.

Patterns of Postsecondary Participation • Among students with top test scores, virtually all students from the top quarter of families in terms of income and parental education enroll in postsecondary education, but about 25 percent of those in the lowest socioeconomic quartile do not continue their education after high school. • Differences in family background generate smaller differences in postsecondary participation among students with high test scores than among those with lower levels of measured academic achievement. • Gaps in postsecondary enrollment rates by income and race/ethnicity are persistent. Moreover, black and Hispanic students, as well as low-income students, are less likely than others to complete degrees if the