With new universities breaking ground everywhere from Assam to Anatolia, and with the American higher educational model being the world’s pre-eminent one – US universities hold eight of the top ten places in the 2010 Academic Ranking of World Universities compiled by Shanghai Jiao Tong University – it makes sense to examine what kind of effect on the future financial prospects of their students these virgin academic institutions are attempting to emulate. What does the possession of higher educational qualifications mean for the typical graduate of an American university?
The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings, a 2002 report published by the US Census Bureau, presents a wealth of data that seems to prove quite conclusively that the effect of educational achievement on income is a profound one. Some of the key points – with all income figures in 1999 dollars – include:
1. The average annual earnings of full-time, year-round workers aged between 25 and 64 years old educated to high school diploma level was $25,900.00;
2. The equivalent workers in possession of a bachelor’s degree commanded an average annual income of $52,200.00;
3. Those with professional degrees (e.g. in fields such as law or medicine) had average annual earnings of $99,300.00;
4. While the 40-year earnings estimate for high school dropouts was a total income of $1.0m, those with bachelor’s degrees could expect an income of $2.1m over the same period, and individuals with professional degrees $4.4m in compensation for a lifetime of toil;
5. The space in the economy for less educated workers is shrinking: in 1975, full-time, year-round workers without a high school diploma earned 0.9 times the earnings of those with a high school diploma, but by 1999 this income level had been eroded to just 70% of the earnings of the same comparison group. Meanwhile, workers with an advanced degree saw their average earnings increase from 1.8 to 2.6 times the mean income of high school graduates.
With the attainment of higher educational qualifications making a difference in earning capacity of literally millions of dollars over the working lifetime of an individual, education in the United States would appear to be a no-brainer, a state of affairs that much of the world wishes to replicate.