When College Might Not Be Worth It

In our last post, we showed that the economic benefits of a college degree still far outweigh the costs for the typical graduate, with a healthy and consistent return of 12 to 13 percent over the past few decades. But there are many circumstances under which college graduates do not earn such a high return. Some colleges are much more expensive than average, and financial aid is not guaranteed no matter which college a student attends. In addition, the potentially high cost of living on campus was not factored into our estimates. Some students also may take five or six years to finish their degrees, which can significantly increase costs. Further, our calculations were based on median wages over a working life, but half of college graduates earn less than the median. Indeed, even when paying average costs, we find that a college degree does not appear to have paid off for at least a quarter of college graduates in recent decades. In this post, we consider when college might not be worth it and explore differences in the return to college by major.
Is College Still Worth It?

A college degree was once viewed as a surefire ticket to a good job and a clear pathway for upward mobility. However, concerns about the rising cost of college and the struggles of recent college graduates to find good jobs have led many Americans to lose confidence in higher education. This shift in sentiment has become even more widespread since the pandemic, as opportunities and wages have grown for those without a degree as labor markets strengthened. Indeed, many have been left wondering whether college is still worth it. In a two-part blog series, we offer an economic perspective on the value of a college degree, updating our previous research and analysis. This first post examines the costs, benefits, and return for the typical college graduate. We estimate the return to college at 12.5 percent, a rate well above the threshold for a sound investment. Our second post looks beyond the typical graduate and finds a college degree might not be worth it for at least a quarter of college graduates.
Just Released: Are Employer‑to‑Employer Transitions Yielding Wage Growth? It Depends on the Worker’s Level of Education

The rate of employer-to-employer transitions and the average wage of full-time offers rose compared with a year ago, according to the Federal Reserve Bank of New York’s July 2018 SCE Labor Market Survey. Workers’ satisfaction with their promotion opportunities improved since July 2017, while their satisfaction with wage compensation retreated slightly. Regarding expectations, the average expected wage offer (conditional on receiving one) and the reservation wage—the lowest wage at which respondents would be willing to accept a new job—both increased. The expected likelihood of moving into unemployment over the next four months showed a small uptick, which was most pronounced for female respondents.
Why New York City Subway Delays Don’t Affect All Riders Equally

The state of the New York City subway system has worsened considerably over the past few years. As a consequence of rising ridership and decaying infrastructure, the network is plagued by delays and frequently fails to deliver New Yorkers to their destinations on time. While these delays are a headache for anyone who depends on the subway to get around, they do not affect all riders in the same way. In this post, we explain why subway delays disproportionately affect low-income New Yorkers. We show that wealthier commuters who rely on the subway are less likely to experience extensive issues on their commutes.
Human Capital and Education in Puerto Rico
An important element of human capital is educational attainment. A series of recent papers highlights the importance of the quality of education—which determines the skills actually learned, rather than the number of years spent in a classroom—as a main driver of growth.
Migration in Puerto Rico: Is There a Brain Drain?
Given Puerto Rico’s long-term economic malaise and ongoing fiscal crisis, it is no wonder that out-migration of the Island’s residents has picked up.
College May Not Pay Off for Everyone
In our recent Current Issues article and blog posts on the value of a college degree, we showed that the economic benefits of a bachelor’s degree still far outweigh the costs.
Staying in College Longer Than Four Years Costs More Than You Might Think
In yesterday’s blog post and in our recent article in the New York Fed’s Current Issues series, we showed that the economic benefits of a bachelor’s degree still outweigh the costs, on average, even in today’s difficult labor market.