The Difference a College Degree Makes

We’re always told by our parents that we need a good education in order to get a good job. And that we will make more money if we have a good education. But these days we hear of unemployed college graduates camping out in New York city and protesting Wall Street because they can’t find jobs. So let’s take a look at the numbers and compare the unemployment rate based on eduation level.  In the following chart we will look at four educational levels. The first level are those people with less than a High School education. The second level are those with a High School diploma. The third level are those with some college education or an associates degree. And finally those with a Four Year College Degree.

As we can see from the chart above, obviously the unemployment rate is the highest for those with the least education… as we would expect. Logically if you were an employer you would lay off the least educated employees first because they are more readily replaceable. We can even tell by the numbers the actual difference a high school education makes. The average unemployment rate for the period from 1992 through October 2011 for High School graduates was 5.5% while the average for those who didn’t graduate from High School was 9.2%. So simply by getting a High School education, you decreased your odds of being unemployed drastically with the actual difference being 3.7%.  But if you look at the chart you will see that a High School education was even more valuable than that. The real benefit of being able to get a job is when jobs are scarce, so even though the average difference was 3.7% during bad times, i.e. when the overall unemployment rate is higher the difference climbs even more.

First, let’s look at the difference just a high school education makes. [Read more…] about The Difference a Degree Makes in Unemployment Levels