An increase in college degree attainment between 2020-2020 is linked to a $14.2 trillion gain in ... [+]
The proportion of U.S. adults with a college degree increased by 6.7 percentage points, from 38.5% to 45.2% between 2010 and 2020. As a result, U.S. workers are estimated to earn an additional $14.2 trillion over their lifetimes. That’s one main takeaway from a recent report from the Georgetown University Center on Education and the Workforce.
The report, “Learning and Earning by Degrees: Gains in College Degree Attainment Have Enriched the Nation and Every State, but Racial and Gender Inequality Persists,” explores the economic payoffs and nonmonetary benefits linked to increased college degree attainment in the second decade of the 21st century. It relies on federal government data such as the U.S. Census Bureau’s American Community Survey and the National Center For Education Statistics.
Not all of the findings were positive, however. Every demographic group saw increases in college degree attainment over the last decade, but attainment gaps between racial and ethnic groups remained largely unchanged, and large racial and gender differences in lifetime earnings also persisted.
“Increased college degree attainment has been a boon to many workers and to society at large, but we’re still a long way from racial and economic justice,” CEW Director and lead author Anthony P. Carnevale said in a press release. “While all racial/ethnic groups increased their educational attainment, substantial attainment gaps persist between white adults and Black/African American, Hispanic/Latino, and Indigenous adults. Attainment gaps by race/ethnicity were significant in 2010, and they remained significant in 2020.”
Increases In Degree Attainment And Lifetime Earnings
The proportion of the population holding a college degree grew by 6.7 percentage points between 2010 and 2020 – increasing 0.7 percentage points for people with associate’s degrees (8.5% to 9.2%), 3.3 percentage points for those with bachelor’s degrees (19.2% to 22.5%), and 2.7 percentage points in the proportion with graduate degrees (10.8% to 13.5%).
By contrast, the proportions of adults who had completed some college or a short-term certificate, earned a high school diploma, or had less than a high school education all declined by between 1.9 and 2.5 percentage points during this same time period.
The researchers estimated the net lifetime (40 years) of earnings gains associated with increased degree attainment after factoring in the likelihood of being employed and the net costs of paying for additional education beyond high school. They found, as have others, a significant earnings premium associated with earning a college degree during this time period.
Compared to the average high school graduate, the earnings premiums were:
- $495,000 over a lifetime for people who completed an associate’s degree;
- $1 million for those who completed a bachelor’s degree; and
- $1.7 million for those with a graduate degree.
CEW then extrapolated these increased earnings to the whole population. After adjusting for population growth, researchers found increased levels of college degree attainment were associated with the $14.2 trillion in overall net lifetime earnings gains:
- $641 billion in gains from increased associate’s degree attainment;
- $5.9 trillion in gains from increased bachelor’s degree attainment; and
- $7.6 trillion in gains from increased graduate degree attainment.
Demographic Differences
Despite the overall increases in college degree holders, the education gaps between white workers and other racial/ethnic groups have not been eliminated. That’s because the attainment gains for most nonwhite racial/ethnic groups did not exceed those made by white adults.
Between 2010 and 2020, the difference in college degree attainment narrowed slightly between white adults and Hispanic/Latino adults, as did the attainment gaps between white adults and adults from other/multiracial backgrounds.
However, degree attainment gaps widened between white adults and American Indian/Alaska Native adults, Native Hawaiian/Pacific Islander adults, and Black/African American adults.
Asian/Asian American adults were the only racial/ethnic group to achieve higher educational attainment than white adults, but that advantage decreased slightly over the decade.
The gaps occurred entirely at the bachelor’s or graduate degree levels, where the earnings premium is the greatest.
But even for adults with the same level of educational attainment, racial/ethnic differences in earnings are substantial. At the bachelor’s degree level, for example, median lifetime earnings for white adults are $2 million, compared to $1.7 million for Black/African American adults and $1.5 million for both Hispanic/Latino and American Indian/Alaska Native adults.
Across the decade, white adults experienced the largest cumulative gain ($8.8 trillion), followed by Hispanic/Latino adults ($2.1 trillion), Black/African American adults ($1.8 trillion), Asian/Asian American adults ($1.6 trillion), American Indian/Alaska Native adults ($20 billion), Native Hawaiian/Pacific Islander adults ($15 billion) and other/multiracial adults ($594 billion).
The CEW report also found that within nearly all racial/ethnic groups, women’s college attainment exceeds that of men. Nonetheless, men enjoy larger lifetime earnings than women within the same racial/ethnic group at every degree level.
“Equal degree attainment does not mean people earn the same. In fact, women need much more education than men to reach the same earnings,” said Jeff Strohl, CEW’s director of research and a co-author of the report, in the press release. “For example, the median annual earnings for white women with bachelor’s degrees are roughly $41,000, compared to median annual earnings of more than $42,000 for white men who have some college credit but no degree.”
State Differences
Washington, D.C., had the largest increase from 2010 to 2020 – 12.07 percentage points – in the proportion of adults with an associate’s degree or higher. D.C. was followed by North Carolina with an 8.31 percentage point gain. Rounding out the top five were Pennsylvania (+7.96 pp), Tennessee (+7.91 pp) and Kentucky (+7.88 pp).
Oklahoma had the dubious distinction of seeing the smallest gain — 3.42 percentage points — in the proportion of adults with an associate’s degree or higher. The rest of the bottom five were Alaska (+4.13 pp), Hawaii (+4.52 pp), North Dakota (+4.58 pp) and Rhode Island (+4.64 pp).
According to CEW estimates, every state reaped billions of dollars as a result of the additional degree attainment of its workers. The amounts ranged from $9 billion in Wyoming and $15 billion in North Dakota to $1.4 trillion in Texas and $1.9 trillion in California.
The CEW is a research and policy institute within Georgetown University's McCourt School of Public Policy. It has become one of the more influential sources of data about the connections between education, career qualifications, and workforce participation, publishing numerous studies about the benefits of higher education.
In addition to national, demographic and state data on degree attainment and monetary earnings, the report also summarizes several documented noneconomic benefits of increased education, including those involving health, crime and incarceration rates, resistance to authoritarianism and openness to different perspective, personal happiness, and levels of civic participation.
