How much value does a college education have?
According to a new study released by the University of Georgia’s Selig Center for Economic Growth, it is more than $2 million per individual, and researchers say degrees not only help boost the bottom line for graduates but also for the state’s gross domestic product (GDP).
Looking at statistics from the U.S. Census Bureau’s American Community Surveys from 2014-2018, the Selig Center’s report shows the difference and impact higher education can have on students – as bachelor’s degree holders earn $1.2 million over their lifetimes compared with those who have high school diplomas. Even those who attend two-year colleges earn $415,000 more than those who don’t.
The study notes that a simple 1% increase in state college or university graduates would boost GDP by 0.5% and that further investment in students would only contribute to that number. For example, they note that boosting bachelor’s degree holders from the current 33.4% of students to 50% would “increase Georgia’s potential GDP by $45.7 billion, or 7.7% of actual GDP. Even if Georgia managed to get to the U.S. average by increasing those with a bachelor’s degree by just 0.6%, the annual potential GDP would be $1.6 billion.
“We expect these estimates will both motivate Georgians to obtain college degrees and encourage policymakers to support higher education by funding a need-based financial aid program,” Alexandra Hill, a senior research analyst, and Jeffrey Humphreys, director of the Selig Center, said in the report. “Georgia is one of only two states in the nation without one. The upshot is that recognizing the benefits of college degrees should help ensure that Georgia does not lose too much potential GDP because it failed to reach college attainment benchmarks.”
Georgia’s numbers for the part mirror those across the U.S. However, as those students advance they do earn far less than over their lifetimes than those in other regions. A master’s degree holder nets $443,000 in additional earnings, while those in Georgia manage only $221,000 more. That number is exacerbated among professional degree holders, where the U.S. average additional income shows $1.9 million while those in Georgia earn $1 million more.
Still, that is a huge potential increase in earnings across the board for individuals and for state and local economies by boosting profits at companies and adding to tax revenues. Authors suggest there aren’t enough skilled workers to fill many positions in Georgia.
“In many ways, postsecondary educational attainment is a panacea that brings prosperity to all, so Georgia should strive to maximize its economic potential by increasing college graduation rates,” the authors said.