The financial benefits of education are well known—the typical person with a high school diploma tends to earn more than a person without a diploma, and the typical college graduate tends to earn even more.

With limited resources, policymakers often face a key trade-off: Where should they focus educational intervention efforts? Should investments help more high school students get to graduation day or increase the number of students who enroll and attain degrees at four-year colleges?

In a recent report, the Social Genome Model team looked at the potential effects of increasing attainment of high school, associate’s, and bachelor’s degrees on later-life outcomes. Our modeling results reveal some information that can help policymakers navigate these trade-offs.

A bachelor’s degree can change a person’s earning trajectory more dramatically than a high school diploma, but interventions to support high school graduation are likely to help more people. And the typical returns to a degree vary by not only the level of the credential but also sex and race and ethnicity. As postsecondary enrollment continues to recover from the COVID-19 pandemic and as potential students examine the value of a higher education, understanding the magnitude of these returns is especially important.

Increasing educational attainment generates strong economic returns

Increasing access to higher education can convey a host of individual and societal returns, although these returns vary by demographic group (PDF). In our analysis of three educational interventions, we looked at projected returns for people who wouldn’t otherwise get a diploma or degree. These “marginal” graduates—those who are prompted to attain a degree because of the intervention—can often experience substantial earnings returns relative to their previous trajectories.

We looked at the estimated effect of these interventions if they were implemented with fidelity at a national scale (i.e., at all high schools, all two-year schools, or all four-year schools) on average earnings at age 30 and projected lifetime earnings. The first, Small Schools of Choice (SSC) (PDF), is aimed at increasing high school diploma attainment. The second, the Accelerated Study in Associate Programs intervention, provides supports for finishing an associate’s degree. The third, the High Achieving Involved Leader (HAIL) scholarship intervention, identifies high-achieving students from low-income families and informs them of their eligibility for free tuition and fees at the University of Michigan.

Broadly, as the level of educational attainment increases, fewer people overall are able to benefit (i.e., attain a diploma or degree). This attrition makes sense, as credentials are cumulative, and a student must earn a high school diploma or GED before attaining an associate’s or bachelor’s degree. Of course, these interventions could be more targeted. Policymakers could intervene only in high schools with a graduation rate below the national average, for example. Considering the overall national effect allows for the most direct comparison of these three interventions.

Because of its broader scale, the intervention that increases high school degree attainment had the largest overall average effect. Averaged across all people in our model, the SSC intervention raises average incomes at age 30 by $352 and discounted projected lifetime earnings by $14,615.