June 28th, 2011 by Hal Grossman
David Leonhardt of the New York Times may be the best explainer around of economics to us non-economists. His column last Sunday was about two recent studies of the economic returns to a college degree.
One study looked at the B.A. as an investment, and found that it yields an average return of 15% per year. This compares with a 7% return for stocks, 3% for AAA corporate bonds, and less than 1% for real estate.
The other study is more surprising. It found that college graduates in jobs that don’t require a college degree still earn more than their non-college graduate coworkers. Plumbers with a B.A. earn 39% more than other plumbers, firefighters 25%. For hairdressers, the salary “bump” is 69%, and for dental hygienists it’s 76%.
Why should this be? One explanation is that college graduates in non-college jobs are given more demanding assignments and promotions more frequently than their coworkers. Another explanation is that completing college teaches some non-academic skills, like planning and persistence, that are valuable in just about any kind of work.
So if your first job after college is in a field that doesn’t require a B.A., don’t think that you’re a failure — you may be a success in the making.