Investing in a college degree still pays off for most students with higher salaries and greater wealth, but in recent years it has become riskier, splitting graduates more widely into haves and have-nots.
“It just has not been the blanket guarantee of following the same path to prosperity that the earlier generations followed,” economist William Emmons of the St. Louis Federal Reserve tells The Wall Street Journal.
There are three related shifts causing economists to re-examine the returns of college: 1) the wages of college graduates have remained mostly flat this century, after inflation; 2) the cost of attending college has soared; and 3) even with higher salaries, significant numbers of college graduates in recent years are failing to build the kind of wealth that previous generations did.
The question of higher education’s value has gained urgency because so many more Americans are going to college than before, and because they are paying far more to do so. College graduates still earn much more than those who never got an education beyond high school, and are more likely to have a job than those who didn’t go to college.
But, while college grads’ inflation-adjusted wages rose steadily throughout the 20th century, they have been flat since about 2001. Read the full story.