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Do Kids Need College?

The Earnings Chasm

Proponents of academia cite the "truism" that, on average, people with a bachelor's degree earn about a million dollars more over a lifetime than those who have only graduated from high school. New research, though, suggests such estimates are overblown. A recent study by PayScale for Bloomberg Businessweek finds the figure to be closer to $627,000. When adjusted for the fact that more than half of graduates take six years, the earnings gap falls to just $393,000. Even more surprising, 20 percent of men and 16 percent of women who complete college earn less than the average wage of someone who only finished high school, according to the College Board. "Unemployment is high even among university graduates," Vedder says. "They're having a tough time finding traditional white-collar jobs."

Still, it can't be denied that some jobs require a bachelor's degree just to interview or advance. The majority of college alumnae do make more money—even if hired for the same position as someone with just a high school diploma. And once in a job, college grads continue to be given priority. "Money for on-the-job training mostly goes to people with at least a bachelor's degree," says Nicole Smith, PhD, senior economist at Georgetown University's Center on Education and the Workforce. "They're the ones employers choose to invest in." When young people show up for interviews, there are few ways for employers to measure critical thinking—a trait that indicates trainability. "They use diplomas and transcripts," explains Smith, "as indications of potential."