The Education of American Workers

Many people decide to attend college because they believe a college degree will help them get a better job and increase their earnings. In fact, individuals with a

TABLE 4.5 Labor force participation of persons 16 years old and over by highest level of education, age, sex, and race/ethnicity, 2004 "Table 376. Labor Force Participation of Persons 16 Years Old and Over, by Highest Level of Education, Age, Sex, and Race/Ethnicity: 2004," in Digest of Education Statistics, 2004, U.S. Department of Education, National Center for Education Statistics, 2004, http://nces.ed.gov/programs/digest/d04/tables/dt04_376.asp (accessed January 10, 2006)

TABLE 4.6 Unemployment rate of persons 16 years old and over by age, sex, race/ethnicity, and educational attainment, 2002–04

TABLE 4.6 Unemployment rate of persons 16 years old and over by age, sex, race/ethnicity, and educational attainment, 2002–04 (CONTINUED) "Table 378. Unemployment Rate of Persons 16 Years Old and Over, by Age, Sex, Race/Ethnicity, and Educational Attainment, 2002, 2003, and 2004," in Digest of Education Statistics, 2004, U.S. Department of Education, National Center for Education Statistics, 2004, http://nces.ed.gov/programs/digest/d04/tables/dt04_378.asp (accessed January 10, 2006)

TABLE 4.7 Labor force status of high school dropouts by sex and race/ethnicity, selected years, 1980–2004

higher level of education are generally more likely to be working, and they are likely to be earning more than those with lower levels of education. As reported by the U.S. Census Bureau in the Statistical Abstract of the United States: 2006, male college graduates who worked full-time, year-round in 2003 earned an average of $81,007, as compared with male high school graduates" average earnings of $38,331. (See Chapter 6 for complete discussion of earnings and benefits.)

The disparity in earnings increases with more advanced degrees, according to the BLS in Digest of Education Statistics, 2004. In 2002, the median annual income of a male without a high school diploma ($22,070) was only 36% of the median income of a master's degree holder TABLE 4.7 Labor force status of high school dropouts by sex and race/ethnicity, selected years, 1980–2004 (CONTINUED) "Table 381. Labor Force Status of High School Dropouts, by Sex and Race/Ethnicity: Selected Years, 1980 to 2004," in Digest of Education Statistics, 2004, U.S. Department of Education, National Center for Education Statistics, 2004, http://nces.ed.gov/programs/digest/d04/tables/dt04_381.asp (accesssed January 10, 2006)($61,439). The median income of a male with a high school diploma or equivalency certificate ($30,487) was about half as much as that of a master's degree holder. The proportion is similar for women: median annual income for a high school graduate was $20,254 in 2002, approximately 59% of the median income for a female bachelor's degree holder ($34,232) and 48% of the median income for a woman with a master's degree ($42,301). (See Table 4.8.)

There is a long-term difference between the earnings of males and females with the same educational background. Among full-time, year-round workers, males tend to earn more than females across all levels of education. The differential was most pronounced at the professional degree level (medical doctor, law school graduate). In 2002, of men and women twenty-five years of age or older who had attained a doctor's degree, 35.9% of men earned $100,000 or more, as compared with 18.5% of women. (See Table 4.8.)

Beyond the Bachelor's Degree

Having a bachelor's degree opens the door to many occupational options, but a degree itself does not guarantee that a graduate will enter a high-paying career. In general, graduates who major in business, computer sciences, and engineering will find that occupations in their subject areas pay higher salaries than do those in education, the humanities, and social and behavioral sciences. For example, according to the BLS in the Occupational Outlook Handbook, 2006–07, median annual earnings of network systems and data communication analysts ($60,600) and administrative services managers ($60,290) were considerably higher than those for K-12 teachers (between $41,400 and $45,920), salaried writers ($44,350), or social workers $40,080 in May 2004. The starting salaries for engineers graduating with a bachelor's degree in May 2004 surpassed the median annual earnings of many other professions. Among the highest starting salaries that year were petroleum engineering ($61,516), chemical engineering ($53,813), and computer engineering ($52,464).

The lifelong earnings potential of a college degree makes a four-year bachelor's degree attractive to both recent high school graduates and adults returning to formal education to advance their careers. In some fast-growing occupational fields, including health care and education, the highest-paying jobs now require formal education beyond the bachelor's degree for entry or advancement. Figure 4.1 presents a list of twenty large-growth occupations that require a master's, doctoral, or first-professional degree for employment, and the projected change in employment in these occupations from 2004 through 2014.

Twelve of these occupations, including physicians and surgeons, pharmacists, physical therapists, medical researchers, and chiropractors, are projected to be among the highest-paying jobs in the burgeoning field of health care through 2014. Other occupations on the list, including postsecondary (college level) teachers, TABLE 4.8 Distribution of money income and median income of persons 25 years old and over, by educational attainment and sex, 2002school counselors, and school psychologists, are in the fast-growing occupational category of educational services. These education occupations also represent career advancement and salary enhancement opportunities for individuals who enter the field of teaching with a bachelor's degree.