A college education is often seen as a valuable investment in one’s future. Not only does an education provide individuals with the knowledge and skills necessary to succeed in their chosen field, but it also has a significant impact on their earning potential. A recent study conducted by three economists associated with the Federal Reserve Bank of St. Louis-Scott A. Wolla, Guillaume Vandenbroucke, and Cameron Tucker-have shown that even with the cost of obtaining a degree, graduates make more money upon graduation and throughout their lives compared to high school graduates.
This financial benefit is evident shortly after graduation. According to the study, college graduates earned on average $5000 more the first year after graduation than those with a high school diploma. However, by mid-career, college-educated workers were earning $18,000 more–a significant amount that can make a real difference in one’s quality of life.
In addition, the study looked at the return on investment from a college degree compared to investing that money in the stock market. Since 1957, the return on investment in the stock market has been around 10 percent. In 2020, returns from a college education ranged from 13.5-35.9 percent. The study authors noted, “By this measure, a college degree is an excellent investment.”
The benefits of a college education extend far beyond just higher earning potential. Graduates also tend to have lower unemployment rates and greater job stability. They are more likely to have access to a wider range of job opportunities and have the potential for faster career advancement. Additionally, individuals with a college degree are more likely to have access to employer-provided benefits such as healthcare and retirement plans.
If you are on the fence about whether or not to pursue a college education, consider not only the personal and professional benefits that it can offer but also the tangible financial rewards. With college graduates earning an average of $5,000 more per year upon graduation, the value of a college education is undeniable.
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