But no one ever seems to ask what a college degree is worth. The answer is both comforting and alarming.
In 2010, the average college graduate was 25 percent more likely to be in the labor force than was the average high school graduate. Once there, the average college graduate faced an unemployment rate that was less than half that faced by the average high school graduate (4.7 percent versus 10.3 percent). Household income for college graduates is more than twice that of high school graduates ($83,000 versus $40,000).
While cheerful news on its face, the averages mask a devastating truth: College degrees are not created equal. The so-called STEM disciplines — science, technology, engineering and mathematics — increase lifetime earnings by more than $1 million even after deducting the cost of tuition. Meanwhile, almost any major with the word “studies” is a break-even proposition — the increase in the student’s lifetime earnings just about covers the cost of tuition.
The median salary for petroleum engineering majors is $157,000, while the median salary for child and family studies majors is $38,400. The market has spoken and spoken loudly. The top 10 majors in terms of expected salary are all STEM disciplines.
The bottom 10? Special education, recreation and leisure studies, theology, paralegal studies, horticulture, culinary arts, athletic training, social work, elementary education, and child and family studies.
None of this really gets to the underlying travesty. In 1977, the average high school graduate could expect to earn $1.6 million (in today’s dollars) over the course of his career. The average college graduate could expect to earn $2.2 million, for a net benefit of $560,000.
By 2010, the average high school graduate could expect to earn $980,000 versus $2.3 million for the average college graduate, for a net benefit of $1.3 million. It is not that a college degree is worth that much more (except in the STEM fields); it is that a high school diploma is worth so much less.
In the end, “college” is not an investment. A college major is. Chosen wisely, the $120,000 worth of debt is clearly warranted. Chosen poorly, it is nothing but a waste of time, effort and money.
James R. Harrigan is a fellow of the Institute of Political Economy at Utah State University. Antony Davies is a professor of economics at Duquesne University in Pittsburgh.