Education and Synthetic Work-Life Earnings Estimates

This recent report
by the United States Census Bureau looks at the relationship between an
individual’s level of education and their earnings. This report first
uses Synthetic Work-life Earnings (an estimate of the amount of money a
person might make over the course of their lifetime) to discover basic
relationships between education and earnings. Next, the report goes
deeper and looks at whether any differences between racial and gender
groups exist.  Data for this report came from the Multiyear American
Community Survey conducted between 2006 and 2008. Data comes from all 50
states plus the District of Columbia, and all earnings estimates are
reported in 2008 dollars.   

The level of education in the U.S. has been on a steady upward
trajectory for the past 70 years. In the 1940 Census, 25 percent of
people aged 25 and over had a high-school diploma. In 2008, 85 percent
of this group had a high-school diploma. Unsurprisingly, this report
finds a positive relationship between education and earnings. Annual
earnings of those studied ranged from $11,000 per year for a part-time
worker without a high-school degree, to over $100,000 for a full-time
worker with a professional degree.  Education level also plays a large
part into whether someone is employed full-time or part-time.
Sixty-eight percent of people with a doctorate degree are employed full
time, compared to 38 percent of people with less than a high-school
diploma.

Significant differences also exist between gender and racial groups.
Women lag behind men in terms of earnings at every level of education. 
Asian women with a bachelor’s degree are somewhat competitive with some
male groups such as Hispanics, but on the whole still earn much less
than their male counterparts. Overall, the report confirms that the
relationship between education and earnings are strong, and that gender
and race play a significant factor into this as well. These findings are
also relevant for Ohio as only 36 percent of the state’s population has
an associate’s degree or higher. Of those who graduate with a
bachelor’s degree an overwhelming 83 percent of those are white and only
2 percent are Hispanic.

  

Education and Synthetic Work-Life Earnings Estimates
U.S. Department of Commerce
September 2011
Tiffany Julian and Robert Kominski

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