Even though the value of a college degree remains hotly debated, a new study published in American Educational Research Journal confirms college is still a good investment - with an annual 9-10 percent rate of economic return throughout a person’s career.
“Our cost-benefit analysis finds that on average a college degree offers better returns than the stock market,” says Liang Zhang, professor of higher education at New York University’s Steinhardt School of Culture, Education, and Human Development. “However, there are significant differences across college majors and the return is higher for women than men.”
The study analyzed 2009-2021 data from the US Census Bureau’s American Community Survey of 5.8 million people between the ages of 18 and 65, comparing half with bachelor’s degrees and half with high school diplomas only. The study found:
The rate of return on investment in a college education was 9.88 percent for women and 9.06 percent for men - and there’s a larger pay gap between college and high school graduates for women than for men.
The majors with the highest returns were engineering and computer science, exceeding 13 percent, followed by business, health, and math and science, hovering between 10 and 13 percent.
The majors with the lowest returns were education and humanities and art, showing less than 8 percent.
It is likely that the variations in returns across college majors will persist or even increase as technology advances and shapes the demand for skills, Zhang says.
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