the value of a college education
Skip this Video
Download Presentation
The Value of a College Education

Loading in 2 Seconds...

play fullscreen
1 / 19

The Value of a College Education - PowerPoint PPT Presentation

  • Uploaded on

The Value of a College Education. Why Finish Your Degree?. Arthur Blakemore , Ph.D. Chair, Department of Economics Vice Provost Last updated 07-16-07  .

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'The Value of a College Education' - Jeffrey

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
the value of a college education

The Value of a College Education

Why Finish Your Degree?

Arthur Blakemore, Ph.D.

Chair, Department of Economics

Vice Provost

Last updated 07-16-07


There are many reasons to remain in college and get your college degree. Many of the reasons pertain to personal satisfaction. Other reasons are economic and more easily measured. Some of these measurable reasons for getting your degree follow.


Individual earnings are strongly related to educational attainment. People who have completed high school earn more than those who have not; people with a bachelor’s degree earn more than those with only a high school diploma; and those with a graduate education earn more than those with only an undergraduate education. Consider the following:

value of a college education
Value of a College Education
  • Average annual earnings of individuals with a bachelor’s degree are more than 75 percent higher than the earnings of high school graduates.
  • These additional earnings sum to over $1million over a lifetime.
value of a college education5
Value of a College Education
  • The differential in earnings based on educational attainment has increased over time.
  • For example, for full-time male workers between the ages of 35 and 44, the earnings premium associated with having a bachelor’s degree versus a high school diploma has risen from 38 percent in 1980-84 to 94 percent in 2000-03.
value of a college education6
Value of a College Education
  • If the value of a college education is expressed on the same basis as the return on a financial investment, the net return is on the order of 12 percent per year, over and above inflation.
  • This compares very favorably with annual returns on stocks that historically have averaged just 7 percent.

In time periods of rapid technological progress, as we are experiencing now, this earnings premium is likely to grow as workers who have obtained critical thinking skills adapt to innovations far better than those without such skills. College provides the academic platform for critical thinking and continuous learning, attributes required in the modern workplace. As such, a college degree also offers far more in terms of job security.

education and careers
Education and Careers
  • According to Census data in 2006, college graduates between the ages of 25-64 are less likely to be unemployed relative to high school graduates.
  • College graduates are ten percentage points more likely to remain in employment.
  • The average university graduate encounters much better career progression opportunities. Consider:
education and careers9
Education and Careers
  • Salaries average about $40,000 for a college graduate at age 25 and tend to grow steadily to about $65,000 by age 55.
  • A high school graduate can expect to earn $28,000 by age 25, but earns on average only $35,000 by age 55, if still employed.
education and job satisfaction
Education and Job Satisfaction

With life expectancy growing so rapidly, imagine that a typical young person entering college today will work possibly 50 years! Job satisfaction is going to be a very important consideration for a time period approximately three times greater than your current age.

education and job satisfaction11
Education and Job Satisfaction
  • Jobs that require a college degree score far higher in terms of satisfaction.
  • Some jobs are satisfying because they provide an important service to other people.
  • Some because they are interesting and stimulating
  • Some because they pay more.
  • Some because they do all of those things.

They all have in common the requirement of a college degree!

lifetime value
Lifetime Value

Careers that require a college degree are far more likely to have fringe benefits such as health insurance, pension plans and paid vacations. Adding salary, fringe benefits, greater retirement income and greater job security, it is easy to imagine a college degree worth several million dollars over the lifetime of the average individual.

Now consider the following lifetime values:

lifetime value13
Lifetime Value
  • A standard health plan costs more than a $1000 a month for a family of 4. Someone with an employer provided plan usually pays a small fraction of this, saving as much as $10,000 per year.
  • Someone with the normal salary progression, discussed above, contributing 5% of their income a year into a pension plan with an employer match will accumulate $849,000 by age 62 at the average growth rate for stocks.
  • Someone on the non-degree salary progression who contributes 5% of their income without an employer match will accumulate $171,000 by age 62.
lifetime value14
Lifetime Value
  • Attending classes diligently and alertly is a key to college success, no matter how boring your professor maybe.
  • You should spend 15 hours per week in a classroom for 30 weeks for 4 years at ASU, leading to a degree.
  • This is $1,111 of lifetime value per hour spent in the classroom.
lifetime value15
Lifetime Value
  • Studying an average of three hours per credit hour per week instead of one hour is quite often the difference between passing and failing.
  • The extra hours studying can be worth $555 prorated per extra hour.
the college experience
The College Experience
  • College is more than just a learning experience. It is a growing-up experience.
  • It is a social experience that has value.
  • It also is an experience in self-discipline, balancing things that bring immediate enjoyment against things that bring life-time satisfaction and income security.
  • You are here to gain a very valuable all-around experience.
the college experience17
The College Experience
  • Before hitting the snooze button and skipping class, consider the value of that class to you.
  • Before deciding to replace three hours of studying with three hours of partying, consider the value of those study hours to you. Do your socializing after you complete your studying.
the college experience18
The College Experience

Before agreeing to work an extra 10 hours per week for extra spending money and replacing 10 hours of studying, compare the hourly pay of the job with the lifetime value of studying.