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Where Is the Best Place to Invest $102,000--in Stocks, Bonds, or a College Degree?

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Bibliographic Details
Title: Where Is the Best Place to Invest $102,000--in Stocks, Bonds, or a College Degree?
Language: English
Authors: Greenstone, Michael, Looney, Adam, Brookings Institution, Hamilton Project
Source: Hamilton Project. 2011.
Availability: Hamilton Project. Available from: Brookings Institution. 1775 Massachusetts Avenue NW, Washington, DC 20036. Tel: 202-797-6484; Fax: 202-741-6575; e-mail: info@hamiltonproject.org; Web site: http://www.hamiltonproject.org
Peer Reviewed: N
Physical Description: PDF
Page Count: 6
Publication Date: 2011
Document Type: Reports - Evaluative
Education Level: Higher Education
Descriptors: College Graduates, Economic Impact, Labor Market, Salary Wage Differentials, Educational Benefits, Cost Effectiveness, Input Output Analysis, Outcomes of Education, Investment, Employment Potential, Education Work Relationship, Human Capital
Abstract: As the college class of 2011 graduates in the aftermath of the Great Recession, some graduates are struggling to find a good job--or any job at all. As a result, many are questioning whether the time and expense of college was worth it. The authors try to answer this question by comparing the economic benefits of a college degree to its costs, as one would for any other investment. When compared to other types of investments, how does a college degree really stack up? The answer is clear: Higher education is a much better investment than almost any other alternative, even for the "Class of the Great Recession" (young adults ages 23-24). In today's tough labor market, a college degree dramatically boosts the odds of finding a job and making more money. On average, the benefits of a four-year college degree are equivalent to an investment that returns 15.2 percent per year. This is more than double the average return to stock market investments since 1950, and more than five times the returns to corporate bonds, gold, long-term government bonds, or home ownership. From any investment perspective, college is a great deal. This analysis focuses on the average earnings of a college graduate compared to the average person with only a high-school diploma. (Contains 3 endnotes.)
Abstractor: ERIC
Entry Date: 2013
Access URL: https://www.hamiltonproject.org/files/downloads_and_links/06_college_value.pdf
Accession Number: ED539553
Database: ERIC
Description
Abstract:As the college class of 2011 graduates in the aftermath of the Great Recession, some graduates are struggling to find a good job--or any job at all. As a result, many are questioning whether the time and expense of college was worth it. The authors try to answer this question by comparing the economic benefits of a college degree to its costs, as one would for any other investment. When compared to other types of investments, how does a college degree really stack up? The answer is clear: Higher education is a much better investment than almost any other alternative, even for the "Class of the Great Recession" (young adults ages 23-24). In today's tough labor market, a college degree dramatically boosts the odds of finding a job and making more money. On average, the benefits of a four-year college degree are equivalent to an investment that returns 15.2 percent per year. This is more than double the average return to stock market investments since 1950, and more than five times the returns to corporate bonds, gold, long-term government bonds, or home ownership. From any investment perspective, college is a great deal. This analysis focuses on the average earnings of a college graduate compared to the average person with only a high-school diploma. (Contains 3 endnotes.)