August 23, 2012

The Value of a College Degree

Aug. 23, 2012 at 10:44 AM | By Scott Jaschik | Comment Count

Stories abound of college graduates working at Starbucks, living at home and facing an uncertain economic future. And many of these stories have led to increased questioning of the value of a college degree.

But a report released today says that -- despite the current economic hardships faced by people at all levels of education -- the value of a college degree remains strong.

The unemployment rate for recent four-year college graduates is 6.8 percent, higher than the rate for all four-year graduates of 4.5 percent. But the 6.8 percent is much, much better than the 24 percent rate for recent high school graduates. These figures, and a series of others, appear in "The College Advantage: Weathering the Economic Storm," from the Center on Education and the Workforce at Georgetown University.

As the name of the report suggests, the report does not claim that college graduates have been immune from the recession. The report's summary begins with this sentence: "When it rains hard enough and long enough, everyone gets a little wet."

But the report seeks to distinguish between reports of the real difficulties facing recent graduates and the idea that these hardships mean that their degrees lack genuine economic value.

What about all those college grads working at Starbucks? The report uses various databases to say that there is indeed an underemployment problem, and that the underemployment rate for new college graduates is 8.4 percent. But that is less than half of the underemployment rate for recent high school graduates, of 17.3 percent.

In terms of jobs that have been created in recent years, college graduates enjoy a strong advantage in gaining them, the report says. More than half of the jobs created during what economists call the recovery from the recession have gone to college graduates, who make up only one third of the labor force.

Of relevance given Rick Santorum's campaign blasts that some workers didn't necessarily need college degrees, the report's data show that in traditional blue collar industries, those with degrees fared much better than those without.

"Even in traditionally blue-collar industries, better educated workers fared better," the report says. "In manufacturing, employment dropped by 19 percent for workers with a high school diploma or less, but only 9 percent for workers with Bachelor’s degrees or better. In construction, employment dropped by 4 percent for workers with bachelor’s degrees or better and 24 percent for those with high school diplomas or less."

Scott Jaschik is editor and co-founder at Inside Higher Ed. This post is an excerpt from Inside Higher Ed's article "A Degree Still Matters."