- Studies suggest that where you go to college doesn’t matter that much if you’re a relatively wealthy white man.
- But graduating from an elite college can matter a lot for women, in that they wind up earning more money.
- One study found that going to (any) college benefits women and black students regardless of their family income, but it benefits high-income white students more than low-income white students.
- New research by Indeed finds that more than half of US workers don’t hold a college degree. Because the job market is so tight, employers are increasingly hiring workers without college degrees.
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In 2017, I wrote an article about how it probably doesn’t matter where you go to college.
I’d just interviewed the economist Seth Stephens-Davidowitz, author of “Everybody Lies,” in which he cites a well-known study, by Stacy Berg Dale and Alan B. Krueger and published in the Quarterly Journal of Economics, that suggests elite colleges simply accept students with higher earnings capacity. That is to say, going to Harvard or Yale won’t necessarily make you successful — but Harvard or Yale might let you in because they see that you have the potential to make it big.
That logic blew my mind.
But in November 2018, a trio of researchers published another study — using the same data set — that complicated the original findings.
While going to a fancy college might not matter for relatively wealthy white men, it can matter a lot for women. From the abstract: “Attending a school with a 100-point higher average SAT score increases women’s probability of advanced degree attainment by 5 percentage points and earnings by 14 percent.”
The researchers — Suqin Ge, Elliot Isaac, and Amalia Miller — did some further analysis and learned that women who graduate from elite colleges simply work longer than women who graduate from less-selective schools.
That’s largely because women who graduate from elite colleges tend to delay marriage and having kids — in fact, they’re 4% less likely to marry in the first place. Importantly, this means that women who graduate from elite colleges don’t go on to earn higher wages — but their lifetime earnings are higher because they spend more time in the workforce.
I spoke with Ge and she told me these findings didn’t particularly surprise her. Attending a more selective college might not just lead to greater skills or productivity, she said. “Some women, they really change their perspective about what they want to do in the future,” for example investing more in personal or career development as opposed to starting a family.
If there’s a broader takeaway from this study, Ge said, it’s that women’s career and family decisions are much more interrelated than men’s.
Going to college tends to benefit women and black students regardless of their family’s income
Other recent research suggests that the effects of graduating from college (not just an elite one) vary not only based on students’ gender, but also on their race and family income.
According to a 2018 paper by Timothy J. Bartik and Brad J. Hershbein at the Upjohn Institute for Employment Research, graduating from college tends to boost women’s earnings regardless of their family background (although still not even half as much as it boosts men’s earnings). Among men, however, graduating from college yields a significantly bigger income boost for those from a higher-income background than those from a lower-income background.
That paper also found that graduating from college tends to benefit black students regardless of their family background. Among white students, however, graduating from college benefits those from a high-income background significantly more than it benefits those from a low-income background.
In an increasingly tight job market, more employers are hiring workers without a college degree
New research by jobs posting site Indeed, using the most recent US census data on the topic from 2018, found that employers are increasingly hiring workers with less education than a bachelor’s degree. This is because the job market is tight, and the unemployment rate is so low.
Just over 60% of workers don’t have a college degree, so there’s a large pool of these applicants, the study’s author, Nick Bunker, found.
“As the labor market tightens, hiring tilts further toward these less-educated workers. Employers are more willing to hire such workers even though they might not be exact fits for the jobs they are taking,” writes Bunker, Indeed’s economic research director for North America.
College isn’t the solution to income inequality — but it may still be a strong bet for individual students.
So is college not worth it? Not exactly.
While some people have interpreted Bartik and Hershbein’s results to mean that college isn’t worth it for poorer students, Bartik feels differently. “There can still be a consumer return to going to college,” he told Business Insider. Specifically, a 71% return over not going to college at all. But “it turns out the return is somewhat lower for those from low-income backgrounds.”
And despite Indeed’s new research showing that more employers are hiring workers with less than a bachelor’s degree, the Federal Reserve contends that college is still a good investment. According to the Reserve, a college graduate with just a bachelor’s degree earns about $78,000, compared to $45,000 for the average worker with only a high school diploma. This means a typical college graduate earns a premium of over $30,000.
On average, it seems as though college does improve your career prospects — but it does so the most for wealthy, white men who wind up getting a graduate degree and then working on Wall Street or in Silicon Valley.
That’s hardly fair, and these statistics only remind us that even the most well-educated among us can face longstanding social barriers to achieving the success they’ve earned.