Question

6. In the most recent recession, the earnings of college- educated workers declined. This caused many policy makers and those in the press to claim that college was no longer worth it for students. Does this conclusion necessarily follow from the observed changes in college-educated workers’ earnings?

Answer 1

You need to consider other factors for the decline in earnings of college- educated workers as well as the decline in earnings of workers who had no college education. Recession brings in distress for firms to maintain profits and this results in laying those workers off that have lower productivity irrespective of their education level. Hence to consider that college was no longer worth it for students just because even those with college education became unemployed would be misleading.

We know that tuition is rising so the cost of college education is increasing gradually. We also realize that wages of college-educated workers are falling, such that most of the college students are struggling to find good jobs. However, the value of a college degree is still higher than all its opportunity cost and so, investing in a college education is still a wise economic decision. This is because the benefits of college degree outweigh the costs, and there is a return of 15 percent in last 10 years.