This is how you visualize the value of a college science degree
Higher education is a big sacrifice. At the cost of four to 10 years of slurping ramen noodles in a tin can of an apartment, colleges promise a big future paycheck that will make degreeless peers wild with envy. Simply telling graduates that college eventually pays off doesn’t do justice to the deep sacrifices that must be made over the long term. Some very wealthy venture capitalists, such as Peter Thiel, have argued that college is a “bubble,” and the debt isn’t worth the payoff for many millennials.
Now, former Reuters financial blogger, Felix Salmon, published an impressive animated tool to visualize the cost-benefit analysis of going to college at his new outlet, the Fusion network.
In the picture above, the trajectories show two important factors:
1. When a science degree eventually pays more for college grads vs. high school grads.
It isn’t until age 30 that a college degree pays off, even though a college science degree holder is earning about twice the annual income ($78K vs. $42K): that means an impoverished 20s for just about every college degree holder.
An ambitious scientist who goes for the Ph.D. must wait until he or she is 35 to pass the lifetime earnings of a high school grad, even though a doctorate earns near triple the income ($111K vs. $43K).
2. The range of income. There are many very successful college dropouts and high school grads. At the upper tail of these natural born entrepreneurs: the way outperform the average college grad.
At age 35, the 90th percentile of high school grads are earning $71K versus $91K, but have been earning a near equal income for a decade, making the total lifetime earnings much higher. The top tier of high school grads will still out-earn the average science degree holder at age 44.
And there are multiple other factors to consider. A woman earns a fraction of what a man earns, so the earning gap between high school and college is also smaller.
Now, there are a few caveats with this analysis. I believe it radically overestimates the value of college. The database is from Payscale, a startup that collects salary data. But Payscale does not compare people by IQ or socioeconomic status.
These factors make a huge difference. A smart high school grad with parents who own a bank is going to do a lot better than the average high school grad. There’s an entire field of economics that views college as little more than a “signal” to employers about the intelligence of a job candidate.
Econometricians who have compared similar students finds that community college drop-outs do earn a little bit more because of the classes they take, but not much more. Payscale simply does not have this information. I don’t believe the data actually exists anywhere to make these types of estimates, which is one reason the Obama administration is pushing colleges to publish gainful employment data on their graduates.
That said, Fusion’s data visualization is an impressive journalistic project and a model for how education should be evaluated.
Readers can play with the interactive here.
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