In 2013, individuals aged twenty-five to thirty-two (Millennials) with only a high school diploma earned $28,000 annually compared to $45,500 for similarly aged college graduates—a “pay gap” of 62 percent that was significantly narrower in previous generations, according to The Rising Cost of Not Going to College, a new report from the Pew Research Center. In 1979, for example, high school graduates earned 77 percent of what a college graduated earned, as shown in the image below taken from the report. The report also finds that college-educated Millennials are more likely to be employed full-time than their less-educated counterparts (89 percent vs. 82 percent) and significantly less likely to be unemployed (3.8 percent vs. 12.2 percent).
“On virtually every measure of economic well-being and career attainment—from personal earnings to job satisfaction to the share employed full time—young college graduates are outperforming their peers with less education,” the report notes. “And when today’s young adults are compared with previous generations, the disparity in economic outcomes between college graduates and those with a high school diploma or less formal schooling has never been greater in the modern era.”
The report acknowledges that the so-called “Great Recession” hit the Millennial generation “particularly hard.” In fact, 22 percent of Millennials with only a high school diploma were living in poverty in 2013, compared to 15 percent of similarly situated individuals from the previous generation, Generation X, in 1995, and only 7 percent of Baby Boomers in 1979, when those individuals were in their late twenties and early thirties.
The news was not all bad for Millennials. According to the report, Millennials are the best-educated generation in history as more than one-third (34 percent) have at least a bachelor’s degree, compared to 24 percent of similarly situated Baby Boomers in the late 1970s and 1980s.
“At the same time the share of college graduates has grown, the value of their degrees has increased,” the report notes. “Between 1965 and 2013, the median annual earnings of twenty-five- to thirty-two-year-olds with a college degree grew from $38,833 to $45,500 in 2012 dollars, nearly a $7,000 increase.”
During the same time period, however, the median annual earnings for a high school graduate fell from $31,384 in 1965 to $28,000 in 2013.
Findings from the report are based on a new nationally representative Pew Research Center survey of 2,002 adults and are supplemented by a Pew Research analysis of economic data from the U.S. Census Bureau.
The complete report is available at http://www.pewsocialtrends.org/files/2014/02/SDT-higher-ed-FINAL-02-11-2014.pdf.