Study shows rising cost of not going to college - Omaha.com
Published Wednesday, February 12, 2014 at 1:00 am / Updated at 5:20 pm
Study shows rising cost of not going to college

WASHINGTON (AP) — The earnings gap between young adults with and without bachelor’s degrees has stretched to its widest level in nearly half a century. It’s a sign of the growing value of a college education despite rising tuition costs, according to an analysis of census data released Tuesday.

Young adults with just a high school diploma earned 62 percent of the typical salary of college graduates. That was down from 81 percent in 1965, the earliest year for which comparable data were available.

The analysis by the Pew Research Center shows the increasing economic difficulties for young adults who lack a bachelor’s degree in today’s economy that’s polarized between high- and low-wage work. As a whole, high-school graduates were more likely to live in poverty and be dissatisfied with their jobs, if not unemployed.

In contrast, roughly nine in 10 college graduates ages 25 to 32 said that their bachelor’s degree had paid off or would pay off in the future, according to Pew’s separate polling conducted last year.

Even among the two-thirds of young adults who borrowed money for college, about 86 percent said their degrees had been, or would be, worth it.

“In today’s knowledge-based economy, the only thing more expensive than getting a college education is not getting one,” said Paul Taylor, Pew’s executive vice president and co-author of the report. “Young adults see significant economic gains from getting a college degree regardless of the level of student debt they have taken on.”

The latest findings come amid rising college tuition costs, which have saddled young adults in the so-called millennial generation with heavy debt amid high unemployment.

The report found that not only does a college degree typically yield much more inflation-adjusted earnings than before, but a high-school diploma is also worth less. That adds to a widening earnings gap that Pew researchers found mirrors the U.S. gap between rich and poor.

For instance, college graduates ages 25 to 32 who were working full time now typically earn about $17,500 more annually than employed young adults with just a high school diploma ($45,500 vs. $28,000); those with a two-year degree or some college training earned $30,000.

In 1965, before globalization and automation wiped out many middle-class jobs in areas such as manufacturing, the inflation-adjusted gap was just $7,449.

Meanwhile, median earnings for high school graduates have fallen more than $3,000, from $31,384 in 1965 to $28,000 last year.

Young adults with just high-school diplomas are also much more likely to live in poverty, at 22 percent compared with 7 percent for their counterparts in 1979.

Young, employed college graduates are more likely than those with just a high school diploma or less to say their job is a career or steppingstone to a career.

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