A research report by the Center on Education and the Workforce shows the economic impact of education on earnings among degree holders at all levels. Additionally, the report shows the number of associate degree holders increased in the decade between 2010 and 2020. The Bill and Melinda Gates Foundation and the Lumina Foundation funded the research.
According to the findings, attainment gaps still exist between White students and students in all other racial groups. In most cases, the gaps have grown, but remain lowest among associate degree holders.
The economic impact of earning (or not earning) a post-secondary degree cannot be understated. For example, in Michigan, the number of adults with less than a high school diploma dropped by 1.4% between 2010 and 2020. Similarly, the number of adults with only a high school diploma dropped by 2.2% over the same period. In other words, in 2010, 38% of Michigan’s adult population had a high school diploma or less. By 2020, this number had dropped to 34.4%. Also in decline was the number of people who had some college but no degree. The number of associate degree holders increased by 1%. Adults with a bachelor’s degree increased by 3.5% and graduate degree holders increased by 2.2%. Overall, the number of Michigan residents with an associate degree or higher increased by 6.8%.
Researchers estimate that this rising educational attainment will translate into nearly $450B in additional lifetime earnings. But there’s also a dark side to educational attainment and the earnings gaps that are increasing between White workers and workers of other races. The gaps reduce lifetime earnings among Black workers by more than $175B and Hispanic workers by more than $25B.
Lifetime earnings gaps persist for associate degree earners
The researchers also looked at the combined lifetime earnings potential among workers by educational attainment. White workers in Michigan with an associate degree can expect to earn $23B more over their lifetimes thanks to their associate degree. That sounds like a lot, doesn’t it?
When you compare that to the lifetime earnings of Michigan workers with bachelor’s degrees, the view changes a bit. White bachelor’s degree holders in Michigan can expect to earn an additional $174B over their lifetimes. A bachelor’s degree returns more than 7.5 times the lifetime earnings that an associate degree does for White workers.
Bachelor’s degrees also turn out to be a much better investment for Michigan women. Women (of all races) with bachelor’s degrees earned 7.26 times as much as their counterparts with only an associate degree. Michigan women with graduate degrees earned 8.7 times more than those with only associate degrees, and 1.2 times as much as women with bachelor’s degree. In comparison, Michigan men with a bachelor’s degree outearned those with associate degrees by 6.2 percent. Those with graduate degrees realized a lower return (.67 times) than women did over workers with only a bachelor’s degree.
The vast difference in lifetime earnings (especially for women) underscores the most important reason that women cannot settle for an associate degree. Lower lifetime earnings mean a lower standard of living during their prime working years, and lower income in retirement. Women already earn less, and when they’re trying to support a family, a substantially lower earning potential can be economically devastating.
It would help if community college executives took this data seriously and committed themselves to creating more lucrative degree programs for women and minorities.
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