College_Payoff_Summary_Georgetown_2011 - e x ec u t i v e s...

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Education, Occupations, Lifetime Earnings The College Payoff E X E C U T I V E S U M M A R Y Anthony P. Carnevale, Stephen J. Rose and Ban Cheah THE GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE
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Education and earnings interact in complex and often unexpected ways — but there are rules to the game. The College Payoff, a new paper from the Georgetown University Center on Education and the Workforce, uses in-depth data analysis to identify, illuminate and elucidate those rules. This executive summary provides a glimpse of the education and earnings game, and cracks open the rule book for examination.
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The Rule Book Rule No.1: Degree Level Matters. But Rule No.2: Occupational choice can trump degree level. People with less education in high-paying occupations can out-earn people with more education in less remunerative occupations. But Rule No.3: While occupation can sometimes trump education, degree level still matters most within individual occupations. But Rule No.4: Race/ethnicity and gender are wild cards that matter more than education or occupation in determining earnings. For further detail on these rules, read on. 1
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Obtaining a postsecondary credential is almost always worth it, as evidenced by higher earnings over a lifetime. The higher the level of educational attainment, the higher the payoff. What’s more, the gap is widening. In 2002, a Bachelor’s degree-holder could expect to earn 75 percent more over a lifetime than someone with only a high school diploma. Today, that premium is 84 percent. On average: • A high school dropout can expect to earn $973,000 over a lifetime. • Someone with a high school diploma can expect to earn $1.3 million over a lifetime. • A worker with some college but no degree earns $1.5 million over a lifetime. • An Associate’s degree-holder earns $1.7 million over a lifetime. • A worker with a Bachelor’s degree will earn $2.3 million over a lifetime. Graduate degrees confer even higher earnings: • A Master’s degree-holder earns $2.7 million over a lifetime. • A Doctoral degree-holder earns $3.3 million over a lifetime. • A Professional degree-holder earns $3.6 million over a lifetime. Rule No.1: Degree Level Matters. On average, people with more education make more than those with less. Figure 1: Lifetime Earnings by Educational Attainment. Less than High School High School Diploma Some College/ No Degree Associ- ate’s degree Bachelor’s degree Master’s degree Doctoral degree Profes- sional degree $973,000 $1,304,000 $1,547,000 $1,727,000 $2,268,000 $2,671,000 $3,252,000 $3,648,000 2
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There are significant earnings variations between different levels of educational attainment. • 31% of high school dropouts earn more than the median earnings of workers with high school diplomas. • 37% of those with a high school diploma make more than the median earnings of workers with some college/no degree.
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