Do The Benefits of College Still Outweigh the Costs?


By Kristin Hawkins By Kristin Hawkins D


espite rising tuition and falling wages for col- lege graduates in the past several years, a col- lege degree still tends to be a sound investment,


according to a Federal Reserve Bank of New York study released June 2014. In the report “Do the Benefi ts of College Still Out-


weigh the Costs?”, Jaison R. Abel and Richard Deitz, economists with the Federal Reserve Bank of New York, examine the economic costs, benefi ts, and re- turn to an associate’s degree and a bachelor’s degree. The authors show that even with increased tuition and reduced wages, the return to both degrees has held at about 15 percent for more than a decade.


74 The Cattleman September 2014 The return has remained high because the wages of


those without a college degree have also been falling, keeping the college wage premium near an all-time high while lowering the opportunity cost of going to school. The authors also show that the return to a bachelor’s


degree varies with students’ areas of specialization. Students whose majors provide technical training, such as engineering or math and computers, earn the highest returns — 21 and 18 percent, respectively. By contrast, those majoring in the liberal arts or leisure and hospitality tend to have below-average returns. However, every major earned a return of more than 9 percent — a fi gure that easily passes the threshold of


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