How much is a college degree worth? Georgetown University’s Center on Education and the Workforce calculates that a bachelor’s degree will confer an average lifetime earnings of $2.8 million. Not too shabby, but we’ve all heard tales of college graduates mired in student debt, living at home and unable to rise beyond a barista. Employment prospects depend greatly upon which college you attend and what you study.
Some states, from Florida to Washington, have built college websites for high school students and their parents to show what recent graduates actually make in the working world. It can help families decide among institutions and even compare the financial payoff between studying business versus journalism (heaven forbid!).
But a new study finds that these salary figures, designed to motivate students to go to college and major in lucrative fields, are off – sometimes significantly so. A July 2022 analysis from economists at the U.S. Census Bureau and the University of Michigan found that the financial payoff for attending the most prestigious public universities in each state, known as flagships, was actually 10 percent higher than the salary figures that states publish.
States have access to wage data from their unemployment insurance programs, which only cover workers who remain in the state. Individual states have no way of tracking earnings of graduates who move out of state. That means a University of Iowa engineering graduate who flocks to Silicon Valley and earns an impressive starting salary of $150,000 isn’t factored into Iowa’s data of how much a bachelor’s or an engineering degree will get you in the labor market.
“The graduates that leave tend to be higher earning,” said Kevin Stange, an associate professor of public policy at the University of Michigan. “And so that’s why you’re going to misstate the earnings of people if you just look at those who stay.”