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Overlap in Labor Market Returns for Diplomas and Degrees

February 27, 2020

The annual wages of American workers who hold only a high school credential and are in the top half of earners within that group overlap with wages of the bottom half of earners among college graduates, according to a new report from the Manhattan Institute.

In addition, the report found that the 75th percentile of earners among high school-only workers have higher wages than the 25th percentile of earners among college graduates -- meaning that every worker among the top 25 percent of high school graduates in annual wages outperforms every worker in the bottom 25 percent of college graduates.

"This is not because older workers earn more than younger ones, or because workers in prosperous cities earn more than those in struggling towns," said the report, which was authored by Connor Harris, a policy analyst for the institute. "No matter how the data are cut, the reality remains that the labor market is complex: for many people, a high school diploma can be adequate preparation; for many people, a college degree accomplishes little."

The research brief was based on 2017 U.S. Census data on full-time workers between the ages of 25 and 64. It controlled for age and geography and analyzed occupations for workers with overlapping earnings.

"Although college remains a good choice for those who will succeed there and put their degrees to use, many who pursue college today might be better served by alternative pathways toward occupations that require less formal education and offer a chance for advancement," the report concluded. "This is true despite a monomaniacal focus on college preparation and attendance in the American education system."


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