For the past several decades, most high school students have been pushed toward a traditional university education. But now, new data is undermining what many have taken as fact: that obtaining a degree ensures a large increase in income over one’s lifetime. In today’s Carolina Journal, John Hood writes about a National Bureau of Economic Research paper’s analysis, which may surprise a lot of people.
In his research, Gordon found that people who obtain higher education tend to end up living in higher-cost jurisdictions. They’re certainly free to do that, and presumably they know what occupational and residential arrangements will best meet their needs. But studies that fail to adjust for cost-of-living variances can seriously mislead policymakers and the public.
In Gordon’s paper, he cites research showing that as much as two-thirds of the apparent “wage premium†of higher education – the additional income that, it is argued, is caused by getting a college education – disappears when the income data are properly adjusted for living costs. That’s huge.
“Newly released cross-state cost of living data,†Gordon continues, “yield the complementary conclusion that the excess of per-capita income in New York state over the national average vanishes when translated from nominal to real terms and that in Massachusetts falls by half.â€
Certainly, higher income potential isn’t the only reason a person might choose to pursue higher education. But the data puts into perspective the potential return on investment. In light of this, alternatives to traditional college may become even more attractive. Jenna Ashley Robinson of the Pope Center for Higher Education policy discusses some of those alternatives in this Carolina Journal Radio interview.