On This PageApril, No. 237

Why has the economic value of education stopped rising over the past ten years? The most likely explanation seems to be that the booming economy of the late 1990s helped to increase the average earnings of all workers, including those at the low end of the skills distribution.


The Changing Value of Education
Last Updated: 03/15/07
In the 1980s, education was an increasingly worthwhile investment. According to data from the Current Population Survey (CPS), in 1979, men and women with a bachelor’s degree or higher earned $30,507 per year, 77% more than the $17,283 per year earned by workers with only a high school diploma. By 1989, annual earnings of those with a college degree had risen to $37,288, nearly double the $18,952 earned by high school graduates. Similarly, high school graduates earned 47% more per year, on average, than high school dropouts in 1979 ($17,283 versus $11,737), and high school graduates earned 80% more than high school dropouts in 1989 ($18,952 versus $10,522).