New York— The short-term economic benefits that people derive from earning a bachelor’s degree vary according to their own parents’ economic situation, according to a study presented here this week at the annual meeting of the American Educational Research Association.
The study, by Marvin A. Titus, an assistant professor of higher education at the University of Maryland at College Park, notes that many studies have concluded that people with bachelor’s degrees earn substantially more than people without them, but none of the previous studies have looked at the influence of students’ family wealth on how much such degrees pay off.
Using data from the National Center for Education Statistics’ 1996 Beginning Postsecondary Students survey — examining a cohort that entered college in the fall of 1995 — Mr. Titus looked at the incomes earned in 2001 by more than 3,000 study subjects who were employed full-time at that point. He framed such data in the context of family income, while seeking to control for factors such as the selectivity of the college they attended.
The good news his paper offers for low-income students is that people from families in society’s bottom socioeconomic quartile appear to reap slightly bigger economic gains from earning a bachelor’s degree than students from the top quartile.
The bad news is that people from families in the wealthiest fourth of society earned higher incomes regardless of whether they completed college. People from families in the bottom quartile earned an average of $31,059 if they had a bachelor’s degree, $27,126 if they didn’t. People from families in the top quartile earned an average of $35,913 with a bachelor’s degree, and $31,814 without one.
Mr. Titus’s paper suggests that efforts to improve college retention should take into account the payoff of degree completion for different subsets of the population to better understand the decisions students make. The paper says more research is needed on how college students from different subsets of the population acquire social capital that will influence their earnings. —Peter Schmidt
