A college education is worth half a million dollars, says new study

The New York Times has an interesting article pointing out that according to the latest data, going to college is clearly worth the time and money.

For a while now, a lot of discussions on the web and other media have centered around the rising costs of higher education, and the fact that many graduates find it tough to find a job after college, and are stuck with educational loans. However, according to the latest data (in the US), college definitely improves your earnings significantly:

The pay gap between college graduates and everyone else reached a record high last year, according to the new data, which is based on an analysis of Labor Department statistics by the Economic Policy Institute in Washington. Americans with four-year college degrees made 98 percent more an hour on average in 2013 than people without a degree. That’s up from 89 percent five years earlier, 85 percent a decade earlier and 64 percent in the early 1980s.

Why did this have to be said? When calls for students to drop out of college get a lot of press coverage, this can send the wrong message.

Specifically:

When experts and journalists spend so much time talking about the limitations of education, they almost certainly are discouraging some teenagers from going to college and some adults from going back to earn degrees. (Those same experts and journalists are sending their own children to college and often obsessing over which one.) The decision not to attend college for fear that it’s a bad deal is among the most economically irrational decisions anybody could make in 2014.

But what about the fact that the cost of a college education has increased rapidly, and has far outstripped inflation?

It is still a no-contest between the cost of education and the benefits:

The much-discussed cost of college doesn’t change this fact. According to a paper by Mr. Autor published Thursday in the journal Science, the true cost of a college degree is about negative $500,000. That’s right: Over the long run, college is cheaper than free. Not going to college will cost you about half a million dollars.

Read the full article

Of course, all the above data is for the USA. I wonder how different the story would be if similar data existed for India. What do you think?

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