Returns to Secondary Education

The Long- and Short-Run Value of a College Degree

The further we move into the 21st century, the more demand grows for highly skilled labor. Although the supply of highly skilled labor has also increased in recent years, the share of Americans with a secondary education stood at only 30% as of 2013. In turn, more of a premium comes with the types of skills students acquire in a high-level university setting. Ultimately, those who invest in a college education will very likely earn significantly more money over the course of their lifetimes and be rewarded with a wider array of employment opportunities than those without one. CSUN is helping combat this shortage of highly skilled labor, placing many graduating students in a prime position to reap the rewards of this premium on higher education.

Data from the U.S. Census Bureau’s American Community Survey show that full-time workers in Los Angeles County with a college degree earn approximately 52% more per year, on average, than full-time workers with no degree. In Los Angeles County, 5.0% of full-time workers with a college degree—and just 2.7% of those with a graduate or professional degree—live below the poverty line, compared to 14.5% of full-time workers with no degree. And, in Los Angeles County, 16.0% of full-time workers with a college degree have attained a managerial position at their place of employment, compared to 5.8% of full-time workers with no degree.

Moreover, college graduates can expect to see an immediate return on their investment. College-educated workers under 30 years old in Los Angeles County earn, on average, 46% more than those without a college degree. Recent college graduates are also considerably less likely to be unemployed than workers without a degree, and are half as likely to live below the poverty line.

A study conducted by a team of CSUN researchers further illuminates the financial benefit of completing a degree at the University. The researchers tracked the earnings of more than 70% of the students who exited the University between 1997 and 2004, with particular attention paid to earnings one and five years after exiting the University. They find that students who exited CSUN with a degree earned about 30% more one year after entering the labor market than students who exited the University without graduating.2 The researchers also find that this earnings gap widened to 32% five years after the students entered the labor market, further demonstrating the premium placed on higher education in the modern work environment.

A college degree is a highly valuable lifelong asset. And while important in strong job markets like the one in Southern California today, it becomes even more valuable when the economy takes a turn for the worse and businesses cut back on hiring. It is during lean economic times that university-level skills become an even greater dividing line, with college-educated job seekers able to distinguish themselves from other candidates.

“... those who invest in a college education will very likely earn significantly more money over the course of their lifetimes and be rewarded with a wider array of employment opportunities than those without one...”