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The True Value Of Education

The value of college education has been emphasized in the American educational system for a very long time. School districts around the country treat higher rate college admission as emblematic of their success and universities consider admission of first-generation college students to be their contribution to society's upward mobility. But is it possible for this valuable measure of human capital to lose its worth? And what does it mean for a city that has portrayed itself as a historically blue-collar and working-class to having increasing numbers of highly educated residents?

Between 1990 to the mid-2000s, Chicago's adult population over the age of 25 remained steadily around 1.8 million (1.75 million in 1990, 1.82 million in 2000, and 1.77 million in 2006-8 estimate). However, the percentage of that population with college degrees jumped from 19.5 percent in 1990 to 30.2 percent in the mid-2000s. This massive 56 percent increase in less than two decades means that more than 533,000 residents in Chicago have completed at least a four-year college education.

Yet, despite this dramatic shift, Chicago is still behind a number of cities that are composed of more college graduates, including Seattle and San Francisco. (See a really cool chart of this here.) If Chicago's collective aspiration to be a global city becomes a reality, it is likely to attract and accommodate even more highly educated residents with higher earning power and potential.

The significance of a college education, aside from an individual sense of accomplishment and empowerment, might very well come down to a matter of economics and its eventual payoff. Between the report published by U.S. Census Bureau in 1994 and another report produced in 2002, the gap in average lifetime earnings between a high school graduate and a person with bachelor's degree increased from approximately $600,000 to $900,000.

Even if this figure remained the same for the past three years, this amount is more than $955,000 in 2009 dollars. (See another really cool chart here.)

This disparity, however, pales in comparison when lifetime earnings of those with advanced degrees are considered. An average individual with master's degree earns over $1.4 million more than a high school graduate; a doctoral degree more than $2.3 million; and a professional degree more than $3.4 million in their lifetime.

Such a payoff in education has led to decades of societal encouragement for children and adults to attend college. With increasing demand, some institutions increased their enrollment and others created more schools, programs, and degrees. As consumers of education, this means those who seek to earn a degree can choose according to price, schedule, and circumstances. Today, bachelors and advanced degrees can be obtained through just about every way imaginable from part-time, evening, weekend, to online programs.

We undoubtedly have stories of success irrespective of education. However, for every Bill Gates, there are thousands of college dropouts who never reach middle-class levels of earning. Conversely, there are lawyers and doctors who never reap the financial benefits of advanced degrees. But overall, for most Americans, the collective hope is that the increase in the number of college graduates will mean many more people with higher earnings.

Unfortunately, the more likely scenario would be that the abundance of college graduates increases competition in the labor market that eventually leads to lower wages for college graduates and higher demand for advanced degrees.

This mass production of college educations also means the degrees have become increasingly segmented by brand. Higher demand will likely to lead to quality of instruction and institutions that are diluted as mere derivation of high school education for some, while those who have resources manage to retain higher level of education and social networks that come with it.

Most everyone recognizes that those who earned degrees from schools that run television advertisements during the daytime are not likely to compete for the same jobs as those who have degrees from the University of Chicago or Northwestern. Nor are they likely to have share same social networks that can lead to greater opportunities. In short, the gaps in education will likely grow even greater despite larger pool of graduate from higher education.

While policymakers and educators have been striving to create opportunities for anyone to go to college, the point of higher education appears to have been lost in the process.

If the point is to educate the masses in order to empower them with the ability to think critically and to develop intellectual community as a whole, massive college education makes perfect sense.

However, if the point is simply to earn credentials so that they can boost their wages, then the decision-makers need to reconsider the objectives for adult education.

And no matter how global the economy, stigmatization of skilled manual labor is problematic when there is serious demand for auto mechanics, carpenters, and plumbers.

Chicago's history carries an unusually heightened sense of civic engagement among those who are financially better off and highly educated. Such elite organizations as the Commercial Club of Chicago, the MacArthur Foundation and the Chicago Community Trust have influenced the lives of all other residents for generations.

However, the doors to these organizations have been mostly open only to those individuals who attended selected schools or established selected networks.

While the structure and the make-up of these organizations are not likely to change anytime soon, it remains to be seen how the leaders of the city react to rapidly changing labor force.


Kiljoong Kim is a research consultant and doctoral student in sociology at the University of Illinois at Chicago. He welcomes your comments. Read more in the Who We Are archives.


Figure 1: American Community Survey, 2006-2008, U.S. Census Bureau.

Figure 2: Source: U.S. Census Bureau, "The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings," Current Population Reports, P23-210, by Jennifer Cheeseman Day and Eric C. Newburger. Current Population Survey, March supplements, 1998-2005.


Posted on March 29, 2010

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