LAWRENCE (KSNT) – A new study from the University of Kansas confirms “significant long-term economic benefits” of earning a college degree. According to a news release, the KU study is the first to use the Social Social Security Administration’s personal income tax data tracking the same individuals over 20 years to measure individual lifetime earnings.
ChangHwan Kim, a University of Kansas researcher, said the research team included factors such as gender, race, ethnicity, place of birth and high school performance that would influence a person’s lifetime earnings. Those factors also play a role in the probability of those individuals completing college.
The lifetime earnings gap between high school and college graduates is estimated to be around $1.13 million for men and $792,000 for women. Those numbers are consistent with previous studies. However the new KU study found when important socio-demographic variables are accounted for, a man who earned a bachelor’s degree would earn $840,000 more over 50 years than a man with a high school diploma. The average the gap for a woman is $587,000 between earning a bachelor’s degree and a high school diploma.
The study claims the net present lifetime value of college education at age 20 is still six times greater than the total cost of college education for men and 4.5 times greater for women.
“This corroborates a college education still yields a substantially more financial reward than it costs,” said Kim, associate professor of sociology. “Our results show higher growth rates in median earnings over the lifetime of college graduates relative to high school graduates, which suggests greater intra-generational mobility.”
The study was funded by funded by grants from the National Institutes of Health and The Spencer Foundation and conducted by Kim with Christopher Tamborini of the U.S. Social Security Administration and Arthur Sakamoto, a professor of sociology at Texas A&M University.
He said a number of studies have used the Social Security earnings data, but none had applied them to the lifetime earnings of education.
“Our analysis uses long-term earnings for the same individual, which provides a better description of the relationship between education attainment and lifetime earnings than estimating cross-sectional data would,” Kim said.
Kim says their research also found the effects of a graduate degree on earnings persist for people into their 60s – more so than someone who only earned a bachelor’s degree.