Unemployment Rates

With college tuition increases outpacing inflation by a substantial margin, it’s normal to ask whether a college degree is worth the cost. One metric for determining that is whether a degree results in lower unemployment. A recent New York Fed report shows that college graduates have consistently lower unemployment rates than those without a degree. Not only that, but during recessionary periods (the shaded areas in the chart below) those without degrees suffer far higher unemployment rates.

Unemployment rates

Additionally, the trend repeats for wages: even degree holders in the 25th percentile of earnings among recent grads (those aged 22-27) out-earn the median for those holding only a high school diploma.

Wages

For 2018, the median for those with a bachelor’s degree was $44,000, compared with $28,000 for those with a high school diploma. The class of 2018 graduated with an average student loan balance of $29,800, which would translate to monthly loan payments of around $350 for 10 years. Net of loan payments, the median college grad with an average loan balance comes out ahead by a substantial margin.

The report also shows outcomes by majorΒ for recent graduates. Interestingly, many fields with low unemployment rates have higher-than-average underemployment rates.

6 thoughts on “Unemployment Rates

  1. wow the salaries for all the careers listed are quite dismal considering. you cannot raise a family on any of them, let alone live on your own (without room mates) on that in los Angeles. IT is sad that the average debt is a common starting salary, and that is before taxes are taken out. workers are undervalued in all fields. it is disheartening as a parent to see these numbers for average career pay by major. even the mid career levels are dismal. I am fortunate. very fortunate. I do what I love and at 47 make about 85k per year working in animation. my first job in 1995 doing related work was 10/hour. thanks for your posts, they are very informational.

    On Wed, May 29, 2019 at 9:08 AM The College Financial Lady wrote:

    > CollegeFinancialLady posted: “With college tuition increases outpacing > inflation by a substantial margin, it’s normal to ask whether a college > degree is worth the cost. One metric for determining that is whether a > degree results in lower unemployment. A recent New York Fed report show” >

  2. Speaking as a father of two, my wife and I both have Masters degrees. It is becoming more difficult with housing costs alone on our budget. Although we enjoy great careers, I would trade it to hut the reset button and not have student loans. The debt was not worth our future, as we we spent all of our 20s and will be done in our mid 30s paying the cost.

    1. Totally understand this perspective. The averages do not always apply to individual circumstances, and I assume that in your case you have grad school debt as well which is a whole different animal. In general, though, students who borrow within the federal amounts for undergraduate studies and complete their degrees come out ahead of those who do not go to college. The consistent difference in unemployment rates between those with degrees and those without continues to amaze me.

      1. Great points πŸ˜ƒ. Thankfully, all of our student loan debt is federal. We have 0 private debt. πŸ˜‚ The real zinger was the interest accumulation. The issue of interest accumulation seems to be the main complaint for recent grads these days. Even with good paying jobs and lower unemployment, it forces delays in buying homes, gettimg married, starting families etc. I count myself blessed.

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