A College Education is a Risky Investment

College is a risky investment, but you may be able to get a lot more out of living as a college graduate than if you didn’t have a college degree.

The return on an investment in education for an individual is highly variable.  If you look at high school graduates, college graduates, is there a significant difference in income, on average?  The answer is yes.  Significant.  The problem, however, is that the variability around that is huge. 

So you’ll find lots and lots of college graduates for whom the college education did not lead to higher income later on.  I’ll be willing to bet you can find a lot of high school graduates who became carpenters, electricians, plumbers, and over their working lives, earn much more than someone who went to college, majored in liberal arts, and was a clerk or something, had some career that maybe did require a college education, but didn’t really produce much in the way of higher income.

So it’s a risky investment.  But that doesn’t mean you shouldn’t make that investment because the returns from a college education, the rewards from it, take many forms. It does not necessarily mean a higher income producing ability, but you may be able to get a lot more out of living as a college graduate than if you didn’t have a college degree.

In Their Own Words is recorded in Big Think's studio.

Image courtesy of Shutterstock

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