Higher Education Earnings Premium: Value, Variation, and Trends

Higher Education Earnings Premium: Value, Variation, and Trends

February 24, 2014

Abstract

Postsecondary education leads to significant financial benefits for most students, and average earnings premiums have grown over time. However, there is considerable variation in outcomes across individuals, types of credentials, occupations, and geographical locations. This brief discusses some of the different ways the financial benefits of higher education can be measured and documents the high average payoff to college degrees. It emphasizes the importance of recognizing that this high payoff does not eliminate disappointing outcomes for some individuals, while highlighting the fact that focusing on recent college graduates leads to under-estimation of the returns.

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