Tuesday, August 28, 2012

Trends in the College Wage Premium

A shout-out to the Federal Reserve Bank of Cleveland, whose prolific research department produces the most demographically insightful work of the 12 Federal Reserve Banks.

One of Fed Cleveland's latest undertakings is an examination of the college wage premium. The premium is the difference between the median earnings of college and high school graduates, and it has has been growing for decades. Not so fast says Fed Cleveland researcher Jonathan James. He points out that the bachelor's degree group includes people with advanced degrees. After separating them from the mix, he finds all of the past decade's growth in the college wage premium accruing to people with advanced degrees.

"It is the growth in the value of advanced degrees that has accounted for all of the growth in the classical measure of the college wage premium since the 2000s," concludes James.

Source: Federal Reserve Bank of Cleveland, The College Wage Premium

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