Thursday, December 22, 2011

Is a College Degree Worth it?

Every once in a while I get a question from an audience member that surprises me.
A few weeks ago, I talked about the benefits of education. People with more education are generally paid more and find jobs more quickly.  Someone from the audience asked if I expected the benefits of college graduates to diminish and possibly go away completely given the current economic environment.  The inquirer noted that many college graduates have not been able to find jobs. Underlying her question is whether a college degree is worth it.

When the economy goes through a recession as severe as this past one, college graduates as well as high school graduates have a hard time finding jobs.  But unemployment rates by education level show that college is still worth the investment.  The jobless rate for workers with less than a high school diploma was 13.2 percent in November 2011. It was 7.6 percent for individuals with some college or an associate's degree and 4.4 percent for people with a bachelor's degree and higher.
But a college degree does not ensure immediate success.

Many jobs require the strong foundation of writing, math and communicating that can be obtained from a liberal arts degree. Some occupations require more detailed training, such as registered nurses, economists and lawyers.  But the supply of new students is not always equal to the demand for those occupations.  More than twice as many students obtained degrees in economics than were needed based on estimated job openings for occupations most directly using those degrees.  Fortunately, the skills obtained from an economics degree can be used in other occupations, such as credit or financial analysts.

There are other degrees where skills are not as easily transferable, such as anthropologists.
For instance, the number of degrees awarded in the nation last year for anthropology was almost equivalent to the total number of employed workers in occupations that specified a need for that degree.  In fact, based on estimates of the annual demand for that occupation, only about 6 percent of the graduates would find jobs in their chosen field.  So students pursuing a college degree in a field that is not in demand will face significant competition to work in their chosen field.
And if the skills they obtain while in school are not easily transferable to other jobs, then they may not reap the return on their education investment that they anticipated.  So the benefits of a college education erode for those students who can't find jobs.  Researching the demand for occupations before embarking down a path would help manage student expectations.

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