Michael Mandel's Indicator, along a Margin
By Arnold Kling
college costs have kept rising, while the real earnings of young college grads have gone down since 2000. In particular, since the recession started in 2006, real tuitions and fees have skyrocketed, while real earnings have plummeted.
Pointer from Tyler Cowen. I immediately wondered if this reverses the Goldin-Katz contention that we have an undersupply of college graduates.
But of course, to answer that you have to look for marginal differences. One margin is this: what has been happening to the differential between earnings for high school grads and earnings for college grads. Mandel starts his chart in 1995, so I went here, and pulled out the current-dollar figures for 1995 and 2009.
|Male college grad||48856||70568|
|Female college grad||26927||42128|
|Male high school grad||27952||36332|
|Female high school grad||15359||22868|
[UPDATE: typo, spotted by commenter, correctedP
In 1995, the average college-educated male or female earned about 75 percent more than his or her high-school-educated counterpart. In 2009, this differential was wider, at 94 percent for males and 84 percent for females. And my guess is that it looks even better for college grads today if you compare their likelihood of being employed full time to high school grads, relative to 1995.
So, these data are indicative of a recession, as Mandel points out. However, they do not indicate a decline in the value of college education at the margin, which is what I was curious about. My guess, though, is that as a percentage of one year’s tuition, the salary differential for college graduates has gone down considerably since 1995.