The self-sufficiency test
The Richest 0.1% I

The college premium: trends and changes

Those of us who "invested" a small fortune to get a college education would be comforted to see this pair of charts: 02uchigraphic

These charts do a good job in delivering the key messages.  Some of you will approve of the "Percentage employed" chart which abides by the start-at-zero rule; in fact, the graph looks exactly the same even if we extended the time-line back to 1995.  For the "Earnings gap" chart, I prefer to explain the data as an index with the high-school grad earnings = 100.

WagepremThe above line charts are great for revealing the trends in time series data.  They, however, hide the period-to-period changesThe graphic on the right indicates that there were only 2 down years for college grads between 1980 and 2000.  It also shows that while 2001 was the peak year in terms of wage differential, college grads made the most gains during the early 1980s (after some big losses in the late 1970s).

 
 
 
 
EnrollpremBecause of the start-at-zero rule, it is impossible to see period-to-period changes in the employment rate chart.  In creating the second chart to our right, I first created an employment rate index similar to the wage premium index above, using the high-school grad employment rate = 100; then, I plotted how the index changed over time.  Here, we are surprised to see that there have been the same number of up and down quarters in the past 10 years.

Reference: "College Still Counts, Though Not as Much", New York Times, Oct 2 2005.

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