Education Matters: Earnings by Educational Attainment Over Three Decades

Education Matters: Earnings by Educational Attainment Over Three Decades

Order Code 95-1081 E
Updated November 17, 2004
CRS Report for Congress
Received through the CRS Web
Education Matters: Earnings by Educational
Attainment Over Three Decades
Linda Levine
Specialist in Labor Economics
Domestic Social Policy Division
The amount of education that individuals accumulate has an important influence on
their experience in the labor market. Workers with more years of education typically
encounter less unemployment. Conversely, as educational attainment increases, earnings
typically rise. These relationships have held up over time, and in some periods, have
intensified. College graduates’ earnings grew so much more rapidly than those of less
educated workers during the 1980s, for example, that it prompted ongoing interest in the
extent of wage inequality among U.S. workers.1
Workers with a bachelor’s degree are much better off today, compared to less
educated workers, than they were some three decades ago. As shown in Table 1, the
average wage advantage of male college graduates over male high school graduates grew
from about 50% in the latter half of the 1970s to at least 90% thus far in the current
decade. The average premium paid to female college over female high school graduates
similarly increased, going from about 40% to about 80% during the same period.
Workers with the least education generally have experienced the slowest wage
growth. This has been particularly true for men. Weakness in comparatively high-paid
male-dominated industries in which many jobs typically require 12 or fewer years of
schooling (e.g., manufacturing) likely explains some of the relatively meager wage gains
among less educated men.
Over the years, women’s wages have increased to a much greater degree than men’s
wages at each educational level. Nonetheless, men who lack high school diplomas
continue to earn slightly more than female high school graduates and slightly less than
women who have some postsecondary education.2
These one-year earnings differences by education level are estimated to produce
markedly wider disparities over an individual’s working life. Among full-time year-round
1 For information on wage inequality see CRS Report RL31616, The Distribution of Earnings of
Wage and Salary Workers in the United States, 1994-2002, by Gerald Mayer.
2 For information on the gender wage gap see CRS Report 98-273, The Gender Wage Gap and
Pay Equity: Is Comparable Worth the Next Step?, by Linda Levine.
Congressional Research Service ˜ The Library of Congress

CRS-2
workers, high school dropouts might have average earnings totaling $1.0 million (in 1999
dollars) over a 40-year working life; high school graduates, $1.2 million; those with some
college or an associate’s degree, $1.5-$1.6 million; and college graduates, $2.1 million.3
Table 1. Mean Earnings of Workers 18 Years or Older by
Highest Level of Educational Attainment
High
Y
Not a
High
Some
Not a
school
Some
e
high
school
college or Bachelor’s
high
graduate college or Bachelor’s
a
school
graduate
Assoc.
Degree
school
(or
Assoc.
Degree
r
graduate (or equiv.)
Degree
only
graduate
equiv.)
Degree
only
Male
Female
2003 21,447
33,265
38,451
63,084
14,214
21,659
24,848
38,448
2002 22,091
32,673
38,377
63,503
13,459
21,141
23,905
37,909
2001 21,508
32,363
37,428
63,354
14,523
20,489
24,268
36,913
2000 21,007
31,446
37,373
62,609
12,739
19,162
22,779
35,328
1999 18,855
30,414
35,326
57,706
12,145
18,092
21,644
32,546
1998 19,155
28,742
34,179
55,057
11,353
17,898
21,056
31,452
1997 19,574
28,307
32,641
50,056
10,725
16,906
19,856
30,119
1996 17,826
27,642
31,426
46,702
10,421
16,161
18,933
28,701
1995 16,747
26,333
29,851
46,111
9,790
15,970
17,962
26,841
1994 16,633
25,038
27,636
46,278
9,189
14,955
16,928
26,483
1993 14,946
23,973
26,614
43,499
9,462
14,446
16,555
25,232
1992 14,747
22,811
25,366
40,039
9,248
14,073
15,922
23,991
1991 15,056
22,663
25,345
38,484
8,818
13,523
15,643
22,802
1990 14,991
22,378
26,120
38,901
8,808
12,986
15,002
21,933
1989 14,727
22,508
25,555
38,692
8,268
12,468
14,688
21,089
1988 14,551
21,481
23,827
35,906
7,711
11,857
14,009
19,216
1987 14,544
20,364
22,781
33,677
7,504
11,309
13,158
18,217
1986 13,703
19,453
21,784
33,376
7,109
10,606
12,029
17,623
1985 13,124
18,575
20,698
31,433
6,874
10,115
11,504
16,114
1984 12,775
18,016
18,863
29,203
6,644
9,561
10,614
14,865
1983 12,052
16,728
18,052
27,239
6,292
9,147
9,981
13,808
1982 11,513
16,160
17,108
25,758
5,932
8,715
9,348
12,511
1981 11,668
15,900
16,870
24,353
5,673
8,063
8,811
11,384
1980 11,042
15,002
15,871
23,340
5,263
7,423
8,256
10,628
1979 10,628
14,317
14,716
21,482
4,840
6,741
7,190
9,474
1978
9,894
13,188
13,382
19,861
4,397
6,192
6,441
8,408
1977
8,939
12,092
12,393
18,187
4,032
5,624
5,856
7,923
1976
8,522
11,189
11,376
16,714
3,723
5,240
5,301
7,383
1975
7,843
10,475
10,805
15,758
3,438
4,802
5,109
6,963
Source: Created by the Congressional Research Service from U.S. Bureau of the Census data.
3 U.S. Census Bureau, The Big Payoff: Educational Attainment and Synthetic Estimates of Work-
Life Earnings, P23-210, July 2002.