Conventional wisdom is overwhelmingly that earning a B.A. is now less and less valuable. The reality is the exact opposite: the young adult B.A. advantage is large and growing post pandemic.
The Pew Research Center just released a report titled Is College Worth It? that documents both that conventional wisdom of the lack of value in obtaining a B.A. and the exact opposite reality.
The report has national poll data on how Americans answer that question. And also economic outcome data by education attainment today, a decade ago and fifty years ago for 25-34 year olds. The survey results found big skepticism that college is worth it, particularly if one has to take out a student loan.
The focus of this post is on the reality of economic outcomes. What may be most striking about the economic well being data is how well 25-34 year olds overall are doing today compared to their own perception, the public’s perception, and their peers a decade ago. No matter your education attainment, 25-34 year olds today are doing substantially better than 25-34 year olds a decade ago. The notion that young adults post pandemic are doing far worse than young adults prior to the pandemic is simply inaccurate.
This is particularly true for young adults with a B.A. A completely different reality emerges from the data than conventional wisdom or the messaging that young people are getting from elites about the value of a B.A. The report contains lots of data on labor force participation, full time/year round employment, poverty rates and median household income. Most broken down for men and women. But to keep this post short here I want to focus on median earnings from work and median net worth. All the data tell the same story, the young adult B.A. advantage is substantial and growing.
Let’s start with median work earnings for full time/year round workers between the ages of 25 and 34. All figures are in $2022, so they are inflation adjusted.
- Median earnings for males in 2023 is $77,000 for those with a B.A.; $50,000 for those with some college but less than a B.A.; and $45,000 for those with a high school degree.
- Median earnings for females in 2023 is $65,000 for those with a B.A.; $40,000 for those with some college but less than a B.A.; and $36,000 for those with a high school degree.
The report also includes data on median net worth of households headed by a 25 to 34 year-old. Net worth means that the data includes subtracting student loans outstanding. Median net worth in 2022 for those with a B.A. was $120,200; for those with some college but less than a B.A. $52,900; and for those with a high school degree $30,700.
How does this compare to a decade ago?
- Median earnings for males in inflation adjusted dollars is up $9,500 for those with a B.A.; $900 for those with some college but less than a B.A.; and $5,700 for those with a high school degree.
- Median earnings for females in inflation adjusted dollars is up $9,800 for those with a B.A.; $2,300 for those with some college but less than a B.A.; and $5,100 for those with a high school degree.
Median net worth of households headed by a 25 to 34 year-old in inflation adjusted dollars is up for those with a B.A. $73,600; for those with some college but less than a B.A. $37,200 and for those with a high school degree $18,000. Remember that this data includes subtracting student loans outstanding.
So the depth of the misinformation we have been communicating to young people is astonishing. The reality is with or without student loans young adults are far better off economically with a B.A. Student loans are not crushing those with a B.A., rather they lead to higher work earrings and wealth. And no the advantage of having a B.A. has not declined post pandemic.
Add to that the wage and wealth premium grows substantially after age 34. Not to mention all the other advantages in median household income, time working, regaining a job after losing one, marriage, health, on and on and on.
