Thursday, March 14, 2013

Want a Job? Go to School.

Last year, former Treasury Secretary Larry Summers was asked whether college is still worth it, given soaring tuition. "I think a college education is expensive, but it is very cheap compared to ignorance," he said. "Those who suggest the irrelevance of knowledge in a knowledge economy are very much barking up the wrong tree."

I played around with some employment data this weekend and found a way to show what he means:

Source: Bureau of Labor Statistics; author's calculations.

Since 2000, total employment for those with bachelor's degrees has increased 31%. For those with some college, it's up about 9%. For high school grads with no college, it's down 9%. And for those without a high school diploma, it's down 16%.

There could be some demographic explanations here. The value of an education was much lower 50 years ago than it is today, so the number of�uneducated�workers might be falling in part because older workers who enjoyed a successful careers without much schooling are retiring. And as a larger share of the population gets a college education, the number of workers with a degree will rise even if they're in low-skill work.

But that's nitpicking. We know the bigger picture: The unemployment rate for those with a bachelor's degree is 3.7%, versus 12% for those without a high school diploma (both for ages 25 and up).

Story after story has highlighted the burden of rising tuition and student loans -- rightly, of course. It's a big problem. But the most important story isn't how expensive school has become; it's how expensive forgoing school can be.�

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