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College typically pays off for low-income students, but not as much as it does for their peers. Low-income students, whose families earn $30,000 or less per year, comprise more than one-third of college students. "The Colleges Where Low-Income Students Get the Highest ROI" finds that low-income students have a lower return on investment (ROI) than all students, largely because they tend to earn less as adults. This holds true across public and private institutions and certificates, associate's degrees, and bachelor's degrees. Among institutions that primarily award bachelor's degrees, public institutions generally lead to the highest ROI for low-income students during a 40-year timeframe ($951,000), followed by private nonprofit institutions ($863,000) and for-profit colleges ($763,000). The ROI for low-income students follows a similar pattern at colleges that primarily grant associate's degrees and certificates, with the highest returns from public institutions, followed by private nonprofit and for-profit institutions. However, low-income students' returns from associate's degrees can exceed $1 million, and certificates can be just as lucrative, depending on which college a student attends.

Majoring in business typically pays off. While graduates' earnings and federal student loan debt vary by institution and degree level, the majority of business programs lead to median earnings that are roughly 10 times graduates' debt payments two years after program completion. "The Most Popular Degree Pays Off: Ranking the Economic Value of 5,500 Business Programs at More Than 1,700 Colleges" finds that the economic value of business programs is high compared to the financial returns from other programs, though not as high as returns associated with health, engineering, and computer and information sciences programs. Two years after graduation, associate's degree holders in business have median annual earnings of $30,000 after debt payments. The financial returns from a business degree rise to $43,200 after debt payments for bachelor's degree holders and $51,600 for master's degree holders.

Americans share a strong belief that the country offers access to opportunity. In 2017, 82 percent of Americans said they had achieved the American Dream or were on their way to achieving it. But do all Americans--regardless of race, ethnicity, gender, or socioeconomic status--have equal access to the American Dream? This report examines racial/ethnic and gender gaps in who has a good job as a young adult. It explores how the likelihood of having a good job is affected by the intersection of race/ethnicity and gender and related opportunity gaps in: (1) educational attainment; (2) field of study; (3) occupation; (4) full-time work; (5) access to high-quality work-based learning; (6) experiences with structural racism and sexism; and (7) intergenerational wealth. These elements work together to perpetuate inequality of opportunity for young Americans. It is part of a two-report exploration of the elongated pathway to a good job. [For the companion report, "The Uncertain Pathway from Youth to a Good Job: How Limits to Educational Affordability, Work-Based Learning, and Career Counseling Impede Progress toward Good Jobs," see ED624515.]

The economic and social landscape that young people encounter today is substantially more complex and challenging than the one faced by earlier generations. Technological change and globalization have transformed the labor market, increasing the value of postsecondary education and hollowing out industries that once employed many workers who had no more than a high school diploma. While access to postsecondary education has expanded, gaps in educational attainment and access to good jobs among demographic groups persist. Together, these factors limit opportunity for many young workers. Within each racial/ethnic group, women are less likely to have a good job than men. Many young people seeking to secure a good job find themselves on winding pathways rife with barriers. Among these barriers are three major hurdles: (1) the rising cost of postsecondary education, (2) limited access to high-quality work-based learning (WBL), and (3) an absence of comprehensive counseling and career navigation services. These three hurdles, exacerbated by discrimination, have heightened disparities in educational attainment and financial security by race, class, and gender. Finally, they have slowed young adults' ability to accumulate wealth, especially for those who acquire substantial debt to cover the rising costs of postsecondary education. [For the full reports, "The Uncertain Pathway from Youth to a Good Job: How Limits to Educational Affordability, Work-Based Learning, and Career Counseling Impede Progress toward Good Jobs," see ED624515 and "The Uncertain Pathway from Youth to a Good Job: How Racial and Gender Bias Impede Progress toward Good Jobs," see ED624516.]

The propensity to believe that good things are likely to happen fuels the enduring belief in the American Dream, including the expectation that each generation will enjoy a better quality of life than the previous one. This report is part of a series on young people's pathways to good jobs. In it, the researchers examine how the route from youth dependency to economic independence in young adulthood has changed over time. It explores how the likelihood of having a good job is affected by (1) educational attainment; (2) field of study; (3) occupation; (4) full-time work; (5) access to high-quality work-based learning; and (6) socioeconomic status. These elements work together to perpetuate inequality of opportunity for young Americans. In this report, the researchers focus on overall historical trends and socioeconomic gaps in opportunity. [For the companion report, "The Uncertain Pathway from Youth to a Good Job: How Racial and Gender Bias Impede Progress toward Good Jobs," see ED624516.]

In this report, we present the results of a thought experiment in which we estimated the potential costs and benefits to society of achieving equality in educational attainment and related workforce outcomes by race/ethnicity, class, and gender. We conducted this thought experiment to clarify the role that education can play in reducing inequality. While education has significant value that cannot be measured in monetary terms, we focused in our analysis on monetary outcomes such as earnings, tax revenue, and effects on GDP, along with secondary effects on incarceration costs, public health expenditures, and other public programs, using a stepwise analysis to simulate what would happen if various income, racial or ethnic, and gender equity gaps were closed. We first measured the effect of closing attainment gaps by earnings and race within the population so that low-income adults (those without earnings and those in the bottom 40 percent of earnings) matched the educational attainment of adults in the top 60 percent of earnings, and so that adults from underrepresented racial and ethnic groups matched the educational attainment of White adults. We then examined the marginal gains that would be possible if, in addition to closing attainment gaps, we were able to eliminate federal student loan debt for new completers of college credentials. After exploring the gains that could be possible based on increases in attainment and elimination of student debt for low-income additional credential holders, we conducted a stepwise analysis to estimate the earnings gaps that would remain between White men and other race/gender groups at various equity thresholds. For example, we estimated the wealth gaps that would remain after accounting for new potential cumulative savings (accrued as a result of closing earnings gaps), with the constraint that only 55 percent of wealth on average currently comes from self-generated earnings. By focusing on savings as a first step to accumulating wealth, we were able to analyze wealth at the individual level and build a proxy link between education, earnings, and overall wealth accumulation. We found that simply equalizing attainment by earnings and race/ethnicity would result in 30.5 million more people earning a college credential (a certificate or an associate's degree or above), bringing the total share of Americans with a college credential to 63 percent. We found that reaching this target would have an initial cumulative cost of at least $3.97 trillion, but would create annual benefits to society of more than $956 billion in increased tax revenue, increased GDP, reduced public health expenses, reduced criminal justice expenditures, and reduced reliance on public support programs. The personal benefits of these gains translate to $1.03 trillion in additional annual earnings, corresponding with a $3.17 trillion increase in potential cumulative savings over the course of workers' remaining careers. If we were able to equalize attainment without creating additional debt for new low-income completers, the increase in potential cumulative savings would rise even higher, to $3.76 trillion. It's tempting but inaccurate to interpret these numbers as suggesting that the investment we describe here would pay off in slightly more than four years. Our thought experiment assumes that all costs and benefits are realized immediately, but the harsh reality is that neither costs nor benefits would occur instantaneously. In fact, constraints related to capacity, readiness, and efficiency suggest that even in the best-case scenario--in which substantial systemic reforms allowed more low-income students and students from underrepresented racial/ethnic backgrounds to enroll and succeed in the postsecondary education system--it would take at least 34 years just to fill the gaps at various levels of educational attainment. In this scenario, annual benefits would begin to exceed annual costs after more than nine years and would continue to grow until the annual public benefit reached the maximum of $956 billion annually. Even after equalizing attainment, gaps in earnings and wealth could still take generations to close due to unrelenting inequalities in the workforce, the role of intergenerational transmission in maintaining wealth gaps, and deep structural inequalities maintained over hundreds of years though discriminatory policy and practice. Substantial sustained investment will be required for postsecondary education to realize its full potential to contribute to the public good. [For the executive summary, see ED612642.]

Many Americans would agree that all people should have equal educational opportunity and equal pay for equal work. And yet, inequality in postsecondary education access, college completion, and post-college outcomes such as wages stubbornly persists, along with the impression that achieving equal outcomes would be too expensive and would take too much time to accomplish. A thought experiment that the authors conducted in partnership with the Postsecondary Value Commission demonstrates that equality in postsecondary education would have considerable value to society. While equalizing educational attainment would be costly and time-intensive, balancing the costs with the potential societal benefits shows that an investment in postsecondary equality is money well spent. The top-line finding of the analysis is that equalizing postsecondary educational attainment by economic status and race/ethnicity would require an initial public investment of $3.97 trillion. The fiscal case for the societal value of economic and racial/ethnic justice in postsecondary education is even stronger today than it was before COVID-19 devastated American life. As higher education is forced to rethink its business model, it has the opportunity to more fully realize the potential of educational equity and recommit to enhancing the public good. Racial and economic justice need to be central goals, not secondary concerns or politically correct conceits unsupported by action, as postsecondary institutions reinvent themselves for the current era. [For the full report, see ED612641.]

In partnership with the Postsecondary Value Commission, we conducted a thought experiment on the costs of inequality in the US education system. Our simulation found that the US economy misses out on $956 billion dollars per year, along with numerous nonmonetary benefits, as a result of postsecondary attainment gaps by economic status and race/ethnicity. "The Cost of Economic and Racial Injustice in Postsecondary Education" finds that closing these gaps would require an initial public investment of at least $3.97 trillion, but the benefits would outweigh the costs over time. Equalizing educational attainment without increasing student debt for low-income adults could also boost GDP by a total of $764 billion annually. [During the writing of this report, Kathryn Peltier Campbell, Ban Cheah, Megan L. Fasules, Artem Gulish, Michael C. Quinn, Jenna R. Sablan, Nicole Smith, and Jeff Strohl received funding from the Institute for Higher Education Policy for work done on behalf of the Bill & Melinda Gates Foundation.]

"The College Payoff: More Education Doesn't Always Mean More Earnings" explores how lifetime earnings vary by education level, field of study, occupation, industry, gender, race and ethnicity, and location. The lifetime earnings of a full-time full-year worker with a high school diploma are $1.6 million, while workers with an associate's degree earn $2 million. However, at least one quarter of high school graduates earn more than an associate's degree holder. Bachelor's degree holders earn a median of $2.8 million during their career, 75% more than if they had only a high school diploma. Master's degree holders earn a median of $3.2 million over their lifetimes, while doctoral degree holders earn $4 million and professional degree holders earn $4.7 million. However, one quarter of workers with a bachelor's degree earn more than half of workers with a master's or a doctoral degree.

Over the past half century, postsecondary education has taken on an increasingly important role in career preparation in the United States, with profound effects on the life experiences of young adults. Having a college credential has become both more valuable in the labor market and more expensive, with much of the burden falling directly on students and their families. At the same time, postsecondary institutions are not doing enough to equip students to lead economically independent and fulfilling lives. This essay explores several current trends, including the following: the role of the COVID-19 pandemic in both exacerbating the challenges young adults face on the way to economic self-sufficiency and amplifying postsecondary education's relationship to economic security; the increasing number of jobs that will require at least some postsecondary education and training; and the role that separate and unequal postsecondary institutions play in perpetuating and exacerbating racial and socioeconomic injustice. Based on these trends, the report outlines 10 rules of the college game for students and their families as they choose among different postsecondary institutions and programs. Finally, the essay concludes with recommendations to measure educational value to better align the classroom and the workplace, which will ensure that postsecondary education better fulfills its economic, political, and cultural missions.

The manufacturing workforce has been shaped by decades of industry transformation. Modern manufacturing requires workers with a diverse set of skills to perform functions such as research and development (R&D), product and production design, marketing and sales, and customer support. While workers with a high school diploma or less dominated the manufacturing workforce of the past, today, even production jobs have begun to shift to workers with postsecondary education. The result is that while manufacturing still has good jobs that pay well, they are now going to a downsized, better-educated workforce. This report describes five key trends that define the changing character of the manufacturing workforce: (1) Manufacturing, once the powerhouse of the industrial economy, now plays a smaller, less central role in an economy dominated by services; (2) Manufacturing, despite its decline, is still a source of good jobs for less educated workers; (3) While there are still good jobs in manufacturing, the structure of economic opportunity has shifted in favor of those with postsecondary education and industry-recognized credentials; (4) Manufacturing workers, like workers in other industries, now pursue education and training options beyond traditional degrees and diplomas; and (5) Current trends suggest that there will be no return to the glory days when good manufacturing jobs were plentiful for high school-educated workers. While it continues to be a top source of good jobs in many states, manufacturing is not expected to be a major job generator in the future. The industry's shrinking presence across the country means that it employs fewer workers, provides fewer good jobs, and creates smaller ripples in the surrounding economy. Production itself is being reshaped through new techniques, such as 3-D printing, robotics, and computer-based modeling and simulation. These trends, often associated with advanced manufacturing, have altered the mix of production and non-production functions needed by employers, reinforcing the demand for educated and skilled workers. This report details four suggested practical steps to bolster the economic vibrancy of manufacturing firms and workers: (1) Support research and technology development in manufacturing; (2) Build the capacity of small and medium-sized manufacturers; (3) Build the manufacturing workforce of the future; and (4) Improve worker transitions. Acting on these ideas will require a new understanding from policymakers and the public.

In a republic, the mission of higher education is to empower individuals to live fully in their time free from economic or public dependency. The mission endures, but times change. Because postsecondary education and training have become the most well-traveled pathways to middle class earnings, both students and the educators who serve them need to learn new rules of the college and career game. Students need to shop around for college because higher education is a student's first major investment in the transition from dependent adolescent to independent adult. Students deserve to know what they are paying for. The five rules presented in this report can help students navigate the college game in these uncertain times: (1) Education level still matters, and generally more education is better; (2) Education level matters, but program of study and majors matter even more; (3) While field of study is important, it does not control one's financial destiny--there is great variation in earnings within majors; (4) Less education can be worth more; and (5) Humanities and liberal arts majors never catch up with the highest earning majors.

This third installment of "Hard Times" updates the previous analyses of college majors, unemployment, and earnings over the Great Recession. While there is wide variation by college majors, hard times have become better times for most college graduates, but the recovery is far from complete. Hard times are becoming better times for most college graduates, though how much better varies widely among college majors--and for Communications and Journalism majors, whose unemployment rates are still rising, better times have yet to arrive. Overall, however, unemployment rates among college graduates are declining. The earnings advantage they enjoy over high school diploma workers is holding up, though this is due in part to declining earnings among the latter group. The national trend on earnings has been flat or slightly declining, and earnings among college graduates are no exception. A full recovery in the employment of college graduates, especially at the Bachelor's degree level, may be as far off as 2017 and a full recovery in earnings may take longer. Appended are: (1) Unemployment rates for grouped undergraduate majors, 2009-2012, based on data from the American Community Survey; (2) Median earnings for grouped undergraduate majors, 2009-2012; (3) Unemployment rates by detailed majors, 2009-2012; and (4) Median earnings by detailed major, 2009-2012.

The Great Recession that began in December 2007 laid bare many of the shortcomings of the American workforce, especially the lack of workers with postsecondary education. A large majority of jobs lost in the recession and in the recovery had been held by workers with a high school diploma or less. The only real gains made during the still struggling recovery are in jobs filled by workers with at least some postsecondary education. The gradual shift to more-educated workers has been going on for decades, but the recession gave it a mighty push. It also left the country with an urgent need to find a way to train workers for the more skilled jobs. This executive summary presents findings on the current employment trends. (Contains 1 table, 6 figures and 3 footnotes.) [For the main report, "The College Advantage: Weathering the Economic Storm," see ED534454.]