College Earning Research Paper

e earnings amounts used in the considerator, shown in

gure 4, are our estimates of the 25th percentile, median, and 75th percentile for adults age 18-24, working fulltime for the full year.9 For users who indicate that they would expect to earn more than their peers, the “higher”

gure is used, if lower, then the lower gure. e inator is based on the cross-sectional earnings dierences by age among those with only a high school diploma or only a bachelor’s degree.

Debt danger

Whatever the expected gains and losses associated with going to college, many students borrow money in order to nance direct college expenses and/or living expenses during enrollment, and this can create liquidity problems irrespective of whether the benets of college

College options do not exist in the same vacuum of opportunities that we legislate for children. Diving in as a full-time college student needs to be compared against not going, or going less intensely while working more.

It is perhaps not particularly controversial for us to include an estimate of what a student might have earned with only a high school diploma. But to consider only non-college earnings compared to college earnings fails to acknowledge that a college might contribute to a more fullling life in ways that are not reected in the wages of a job. As the free-enterprise advocate Arthur Brooks said recently, happiness can be strongly related to the work we do, but the rewards may be psychic — “kids taught to read, habitats protected, or souls saved” — rather than dollar currency.10 Furthermore, we do paid work in part so that we can aord leisure, hobbies, travel, giving, the joy of raising children. Once basic needs are met, money and happiness may have little correlation.11

California Competes 11

Private loan payment/Earnings Hazard level

Less than 5% Low

At least 5% but less than 10% Moderate

At least 10% but less than 15% High

15% or more

Of course, thinking about the nonpecuniary value of a college education does not reduce the tuition that a student might need to pay or the debt they may need to take on. But considering these factors may help a prospective student develop a better sense of what he wants from a college education, and how much it might be worth paying to get it. e user may want to peg this personal-enrichment value at the same number

(or zero) for all colleges. But if one college feels like it would be a better life experience, the considerator oers a way to acknowledge and consider that value.

One additional point about the life enrichment value of college: Many of the activities that might seem geared toward that outcome — hanging out with friends, going to football games, going to interesting presentations or exhibits — are activities that contribute to people being happy in college, and therefore continuing through to graduation. Furthermore, they contribute to some of the critical-thinking and human attributes that are often most valued in good employees and leaders.