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The Benefits of Education

The Benefits of Education. Activity 1.2. Why get an education?. One reason is to increase your earning power Each year that you stay in school, you increase your knowledge and skills. You will be getting two tables on earnings of young adults.

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The Benefits of Education

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  1. The Benefits of Education Activity 1.2

  2. Why get an education? • One reason is to increase your earning power • Each year that you stay in school, you increase your knowledge and skills Activity 1.2

  3. You will be getting two tables on earnings of young adults • Table 1 shows median annual earnings for men and women with different levels of education. • Table 2 shows the same information in ratio form • Half of the workers earn above-median salaries. • Half earn below-median salaries. • The salary in the middle is the median. Activity 1.2

  4. Annual Earnings of Young AdultsTable 1. Median annual earnings (in constant 2002 dollars) of all full-time, full-year wage and salary workers ages 25-34, by sex and educational level: 1971-2002 SOURCE: "Median annual earnings (in constant 2002 dollars) of all full-time, full-year wage and salary workers ages 25–34, by sex and educational level: 1971–2002." U.S Dept of Education, Institute of Education Sciences, National Center for Education Statistics. U.S. Department of Commerce, Bureau of the Census, Current Population Survey (CPS), March Supplement, 1972–2003, previously unpublished tabulation (December 2003)

  5. Annual Earnings of Young AdultsTable 1. Median annual earnings (in constant 2002 dollars) of all full-time, full-year wage and salary workers ages 25-34, by sex and educational level: 1971-2002 SOURCE: "Median annual earnings (in constant 2002 dollars) of all full-time, full-year wage and salary workers ages 25–34, by sex and educational level: 1971–2002." U.S Dept of Education, Institute of Education Sciences, National Center for Education Statistics. U.S. Department of Commerce, Bureau of the Census, Current Population Survey (CPS), March Supplement, 1972–2003, previously unpublished tabulation (December 2003)

  6. Annual Earnings of Young AdultsTable 1. Median annual earnings (in constant 2002 dollars) of all full-time, full-year wage and salary workers ages 25-34, by sex and educational level: 1971-2002 SOURCE: "Median annual earnings (in constant 2002 dollars) of all full-time, full-year wage and salary workers ages 25–34, by sex and educational level: 1971–2002." U.S Dept of Education, Institute of Education Sciences, National Center for Education Statistics. U.S. Department of Commerce, Bureau of the Census, Current Population Survey (CPS), March Supplement, 1972–2003, previously unpublished tabulation (December 2003)

  7. Annual Earnings of Young AdultsTable 1. Median annual earnings (in constant 2002 dollars) of all full-time, full-year wage and salary workers ages 25-34, by sex and educational level: 1971-2002 SOURCE: "Median annual earnings (in constant 2002 dollars) of all full-time, full-year wage and salary workers ages 25–34, by sex and educational level: 1971–2002." U.S Dept of Education, Institute of Education Sciences, National Center for Education Statistics. U.S. Department of Commerce, Bureau of the Census, Current Population Survey (CPS), March Supplement, 1972–2003, previously unpublished tabulation (December 2003)

  8. Annual Earnings of Young AdultsTable 2. Ratio of median annual earnings of all full-time, full-year wage and salary workers ages 25-34 whose highest educational level was grades 9-11, some college, or a bachelor’s degree or higher, compared with those with a high school diploma or GED, by sex: 1971-2002 SOURCE: "Ratio of median annual earnings of all full-time, full-year wage and salary workers ages 25–34 whose highest educational level was grades 9–11, some college, or a bachelor’s degree or higher, compared with those with a high school diploma or GED, by sex: 1971–2002" U.S Dept of Education, Institute of Education Sciences, National Center for Education Statistics. U.S. Department of Commerce, Bureau of the Census, Current Population Survey (CPS), March Supplement, 1972–2003, previously unpublished tabulation (December 2003)

  9. Annual Earnings of Young AdultsTable 2. Ratio of median annual earnings of all full-time, full-year wage and salary workers ages 25-34 whose highest educational level was grades 9-11, some college, or a bachelor’s degree or higher, compared with those with a high school diploma or GED, by sex: 1971-2002 SOURCE: "Ratio of median annual earnings of all full-time, full-year wage and salary workers ages 25–34 whose highest educational level was grades 9–11, some college, or a bachelor’s degree or higher, compared with those with a high school diploma or GED, by sex: 1971–2002" U.S Dept of Education, Institute of Education Sciences, National Center for Education Statistics. U.S. Department of Commerce, Bureau of the Census, Current Population Survey (CPS), March Supplement, 1972–2003, previously unpublished tabulation (December 2003)

  10. Annual Earnings of Young AdultsTable 2. Ratio of median annual earnings of all full-time, full-year wage and salary workers ages 25-34 whose highest educational level was grades 9-11, some college, or a bachelor’s degree or higher, compared with those with a high school diploma or GED, by sex: 1971-2002 SOURCE: "Ratio of median annual earnings of all full-time, full-year wage and salary workers ages 25–34 whose highest educational level was grades 9–11, some college, or a bachelor’s degree or higher, compared with those with a high school diploma or GED, by sex: 1971–2002" U.S Dept of Education, Institute of Education Sciences, National Center for Education Statistics. U.S. Department of Commerce, Bureau of the Census, Current Population Survey (CPS), March Supplement, 1972–2003, previously unpublished tabulation (December 2003)

  11. Annual Earnings of Young AdultsTable 2. Ratio of median annual earnings of all full-time, full-year wage and salary workers ages 25-34 whose highest educational level was grades 9-11, some college, or a bachelor’s degree or higher, compared with those with a high school diploma or GED, by sex: 1971-2002 SOURCE: "Ratio of median annual earnings of all full-time, full-year wage and salary workers ages 25–34 whose highest educational level was grades 9–11, some college, or a bachelor’s degree or higher, compared with those with a high school diploma or GED, by sex: 1971–2002" U.S Dept of Education, Institute of Education Sciences, National Center for Education Statistics. U.S. Department of Commerce, Bureau of the Census, Current Population Survey (CPS), March Supplement, 1972–2003, previously unpublished tabulation (December 2003)

  12. Questions for discussion: A • The median salaries for degree holders are higher than those of high school graduates. Does this mean that every degree holder made more than every high school graduate? Explain. Activity 1.2

  13. Questions for discussion: B • In the year 2002, which group of males had the highest median salary? • How much money was that? Activity 1.2

  14. Questions for discussion: C • Write down the salary of the highest-salaried male group in 2002. Now divide it by the salary of the males who had a high school diploma or GED that year. Make your answer correct to two decimal places. • What number did you get? • Can you find it in Table 2 (next slide)? Activity 1.2

  15. Annual Earnings of Young AdultsTable 2. Ratio of median annual earnings of all full-time, full-year wage and salary workers ages 25-34 whose highest educational level was grades 9-11, some college, or a bachelor’s degree or higher, compared with those with a high school diploma or GED, by sex: 1971-2002

  16. Questions for discussion: D • In Table 2, what do the entries “greater than 1.00” represent? Activity 1.2

  17. Questions for discussion: E • In Table 2, what do the entries “less than 1.00” represent? Activity 1.2

  18. Questions for discussion: F • Why would a business pay more to hire an employee with more education, instead of saving money by hiring someone with less education? Activity 1.2

  19. Questions for discussion: G • Looking at Table 2, has the earnings advantage of degree holders gone up or gone down since 1971? (next slide) Activity 1.2

  20. Annual Earnings of Young AdultsTable 2. Ratio of median annual earnings of all full-time, full-year wage and salary workers ages 25-34 whose highest educational level was grades 9-11, some college, or a bachelor’s degree or higher, compared with those with a high school diploma or GED, by sex: 1971-2002

  21. Education pays off • Education has long been associated with greater earnings • But the gap between those with more and less education seems to be growing • Formal classroom education is one way to invest in human capital • Other forms of education, such as vocational and on-the-job training, have similar effects Activity 1.2

  22. You live at an important time • This is the Information Age: a time when the world increasingly depends on generating and processing information • It’s especially important to get a good education Activity 1.2

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