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Discussion Paper
College May Not Pay Off for Everyone
In our recent Current Issues article and blog post on the value of a college degree, we showed that the economic benefits of a bachelor’s degree still far outweigh the costs. However, this does not mean that college is a good investment for everyone. Our work, like the work of many others who come to a similar conclusion, is based in large part on the empirical observation that the average wages of college graduates are significantly higher than the average wages of those with only a high school diploma. However, not all college students come from Lake Wobegon, where “all of the children ...
Discussion Paper
Staying In College Longer Than Four Years Costs More Than You Might Think
In yesterday’s blog post and in our recent article in the New York Fed’s Current Issues series, we showed that the economic benefits of a bachelor’s degree still outweigh the costs, on average, even in today’s difficult labor market. Like others who assess the value of a bachelor’s degree, we base our estimates on the assumption that a student takes four years to finish the degree. But it is not uncommon for people to take longer than that. In fact, recent data indicate that among those who complete a bachelor’s degree within six years, only about two-thirds finish in four years ...
Discussion Paper
The Value of a College Degree
Not so long ago, people rarely questioned the value of a college degree. A bachelor's degree was seen as a surefire ticket to a career-oriented, good-paying job. Today, however, many people are uncertain whether going to college is such a wise decision. It's easy to see why. Tuition costs have been rising considerably faster than inflation, student debt is mounting, wages for college graduates have been falling, and recent college graduates have been struggling to find good jobs. These trends might lead one to believe that college is no longer a good investment. But when you dig into the ...
Working Paper
Explaining Stagnation in the College Wage Premium
After growing substantially during the 1980s through the early 2000s, the college wage premium more recently has been largely unchanged, or stagnant. We extend the canonical production-function model of skill premiums to assess supply and demand contributions to the slowdown in the college wage premium, using annual CPS ASEC data from the early 1960s through 2023. To account for the rising importance of women in the college educated workforce, we estimate a hybrid model that incorporates components that are disaggregated by age and gender. We also allow for non-linearities and changes over ...