1. Are there alternatives to college for achieving financial prosperity?
Yes. The Council of Economic Advisers has concluded that the fastest job growth is likely among occupations requiring an associate degree or a post-secondary vocational certificate. It is projected that nearly half of future job openings will be filled by those with an associate degree or occupational certificate. Some of these “middle-skill” occupations (e.g., electrician, construction manager, dental hygienist, paralegal, and police officer) will pay more than some jobs requiring a bachelor’s degree. In fact, 27 percent of people with post-secondary licenses or certificates - credentials short of an associate’s degree - earn more than the average bachelor’s degree recipient.
2. What advice do recent college graduates offer?
According to the Heldrich Center for Workforce Development Work Trends report published in March 2012, 62 percent of the college graduates surveyed believe they will need more college in addition to a four-year degree to be successful in their careers. When asked what they would do differently if they could, 48 percent responded they would select a major more carefully or choose a different major, while 4 percent responded they would not go to college.
3. What is the trend in the wage premium for college graduates with (i) a four-year degree and (ii) an advanced degree?
The wage premium for college graduates with a four-year degree is approximately 60 percent but has remained basically flat over the past decade. Since 2000, the growth in the value of an advanced degree accounts for most of the growth in the wage premium for college graduates.
4. Are all college majors equal?
No. All fields of study are not equal in terms of employment opportunities and earnings. Specific majors and higher technical skills can and often do offer lower unemployment and higher earnings. The college major chosen has a potentially large effect on the value of a four-year degree. For example, by mid-career, those with engineering and economics degrees will typically earn almost twice as much those with social work and education degrees.
5. Which career choices have the lowest unemployment rates? The highest?
Generally, unemployment rates are higher for non-technical majors, such as the arts or law and public policy - 9.8% and 9.2%, respectively. Unemployment rates are relatively lower for those with education, engineering, or health and sciences degrees - 5.0%, 7.0%, and 4.8%, respectively.
6. How has the total number of college graduates changed in recent years relative to the demand for highly skilled jobs?
From 1970 to today, the percentage of the U.S. population 25 years of age or older with a college degree has grown from 10 percent to 30 percent. The proportion of college graduates, however, has grown faster than the demand for highly skilled jobs. It is projected that by 2020 the number of Americans with a bachelor’s degree will increase by 19 million, while the number of jobs requiring a bachelor’s degree will increase by less than 7 million.
7. Where can I find information to help me make a career choice?
Read the Occupational Outlook Handbook for the United States (available at http://www.bls.gov/ooh/). This resource features hundreds of occupations and provides job descriptions along with the education required, projected earnings, and employment projections.
8. How have increases in college costs differed according to the type of institution?
While tuition has continued to climb, the average annual percentage increase is smaller for private four-year institutions than in the previous two decades. Increases at public institutions (both two-year and four-year) have been larger.
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Fed in Print: An index of the economic research conducted by the Fed.