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Business and Policy Areas
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San Francisco Fed Report Adds Voice to the Debate on the Value of Higher Education

May 14, 2014

A new study by the Federal Reserve Bank of San Francisco asks the question, "Is It Still Worth Going to College?" Economists Mary C. Daly and Leila Bengali use data from the Panel Study of Income Dynamics (PSID) that dates back to 1968, to study the wage premium earned by college graduates over those with just a high school diploma. Those with advanced degrees are excluded from the analysis. "In 2011, the latest data available in our sample, college graduates earned on average about $20,050 (61 percent) more per year than high school graduates," the authors write.

Daly and Bengali describe earnings outcomes by educational attainment, college earnings by graduation decade, the cost of college, and breakeven ages. They conclude that the value of a college degree remains high.

"Although there are stories of people who skipped college and achieved financial success, for most Americans the path to higher future earnings involves a four-year college degree," the authors add. 

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Bob Shea
Senior Fellow, Finance and Campus Management
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