If a four-year college degree is the key to a well-paying job, then why are far fewer Americans making less than their parents? “The Fading American Dream: Trends in Absolute Income Mobility Since 1940” found that the share of children with higher inflation-adjusted incomes than their parents declined from about 90 percent for those born in 1940 to just 50 percent for those born in 1984 (“Fewer Americans are making more than their parents did – especially if they grew up in the middle class,” Brookings, Jul. 25).
Yet during this same period, the percentage of Americans of both sexes earning a bachelor’s degree skyrocketed. According to Statista, 3.8 percent of females and 5.5 percent of males in 1940 earned a bachelor’s degree. In 1984, 15.7 percent of females and 22.9 percent of males did. This data call into question the assumption about the overall monetary value of a college degree. Moreover, the data challenge the assumption that the affluent are those most likely to benefit. According to the study, the bulk of the decline was concentrated toward the top of the income distribution. Equally startling was that those born into the very bottom of the income distribution were still highly likely to earn more than their parents.
You don’t have to be a statistician to realize that something vital is being overlooked in the debate about the indispensability of a college degree. I’ve written often about this assumption. So much of the marketability of a degree depends on when it was earned, from which institution and in which major. Yet we ignore these essential questions, preferring instead to make sweeping generalizations about the indispensability of a college degree for the financial future. I continue to believe that when student loan debt is factored in, a college degree today is worth far less than believed.
(To post a comment, click on the title of this blog.)