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Earnings Differences Between College & High School Graduates, And Those With “Some College”

In it’s annual publication, “The Condition of Education 2008,” the U.S. Department of Education looked back from 1980 to 2006, and a concerning trend emerged. In 1980, a person with a high school diploma could expect to earn on average $34,200 per year, while their bachelor-degreed counterparts, who would be expected to earn more, saw annual income of $44,000 per year. By 2006, those with degrees saw an average salary increase to $45,000 per year, but their high school graduate counterparts saw just the opposite: Those with only a high school education saw a drop in expected earnings to $29,000 per year, a decrease of more than 15% from 1980. The same downward trend also held true for those with “some college,” who had a median income of $36,700 in 1980, only to see it decline to $31,400 by 2006.

The completion of a 4-year degree helped individuals avoid the erosion of “earning power” over time, while those with some or no college were subject to reduced earnings, presumably due to the lack of the 4-year academic credential. The biggest pay-cut areas held for males with only a high school diploma, who earned $11,000 per year less in 2006 than they did in 1980. Gains from 1980 to 2006 for those with degrees were consistent for both men and women, with both genders earning approximately $3,000 more over the 16 year period.

This retrospective look by the Department of Education highlights not only the earning power and income stability of a bachelor’s degree, but also the increasing income disparity between those who hold degrees and who do not. Completion of the degree, rather than just college attendance, appears to be the threshold event that accounts for the observed earnings differences and long-term income stability.

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