Economics in the Real World
Earnings in the US (2000 Census data)
Popn and YRFT
workers, '99 Popn Total Emp’d
21 to 64 years
YRFT
% emp'd
159m 117m 73.5
86m
YRFT
% med $
54 32,717
Let’s consider how employment and median earnings vary
by education level . . .
(and then by age as well) . . .
Source: https://www.census.gov/hhes/www/income/data/earnings/call1usboth.html
ESRC Festival of Social Science, CAGE,
6/11/12
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17% have a bachelor
degree
Popn and YRFT workers,
1999, aged 21-64
Higher employment
rate for those with
more education
total no. dist %
Employed
Higher median earnings
for those with a degree:
College Wage Prem=57%
% YRFT emp'd
YRFT med
%
$
Not a high school
graduate 19,543,685
12 10,109,190
52
6,528,410
33
21,332
High school graduate 44,071,390
28 31,150,550
71 23,102,845
52
27,351
Some college 48,530,160
31 37,571,090
77 27,232,610
56
31,988
Bachelor degree 26,875,435
17 22,288,790
83 17,008,095
63
42,877
Advanced degree 13,901,140
9 11,986,215
86
67
55,242
ESRC Festival of Social Science, CAGE,
6/11/12
9,319,410
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$
70,000
60,000
50,000
age = 21-24
40,000
age = 25-34
age = 35-44
30,000
age = 45-54
age = 55-64
20,000
10,000
0
No HS
HS
Some Col
Degree
ESRC Festival of Social Science, CAGE,
6/11/12
Adv Deg
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Earnings rise with
Education for all age
groups . . .
$
. . . but especially in
later years. “The Jam
is thicker tomorrow.”
70,000
60,000
50,000
age = 21-24
40,000
age = 25-34
age = 35-44
30,000
age = 45-54
age = 55-64
20,000
10,000
Very little growth in earnings by age for this group.
0
No HS
HS
Some Col
Degree
ESRC Festival of Social Science, CAGE,
6/11/12
Adv Deg
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• Previously, we said that the (raw) college
wage premium in the US is 57%.
• What is the evidence for the UK?
• Blundell et al. (EJ, 2000): 12% men, 34%
women (rel. to 2+ A-levels, aged 33 in 1991).
• Naylor and Smith: circa 15% for both men and
women (rel. to 2+ A-levels, aged 30 in 2000) ,
but . . .
• Substantial variation. Eg by academic
attainment; ca12% for 2.2 or below, ca18% for
2.1 or above.
ESRC Festival of Social Science, CAGE,
6/11/12
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Conclusion
• HE is an expensive investment
• But it’s worth it . . .
• . . . and the more so the more effort you
put in to it.
• PS Do ‘shop around’!
Robin Naylor
Department of Economics
University of Warwick
ESRC Festival of Social Science, CAGE,
6/11/12
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