How does a college degree improve graduates’ employment and earnings potential?

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Key Takeaways

• College graduates are half as likely to be unemployed as their peers whose highest degree is a high school diploma.
  
• Typical earnings for bachelor’s degree holders are $40,500 or 86 percent higher than those whose highest degree is a high school diploma.
  
• 87% of bachelor’s degree holders report financial wellbeing, 20 percentage points higher than groups with any other level of education.
  
• Median lifetime earnings are $1.2 million higher for bachelor’s degree holders.

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The evidence that a college degree significantly improves one’s employment prospects and earnings potential is overwhelming. Bachelor’s degree holders are half as likely to be unemployed as their peers whose highest degree is a high school diploma and they make $1.2 million in additional earnings over their lifetime.^1,2 Analyzing outcomes data from over 30 million students, a group of economists also found public universities offer the greatest upward economic mobility.

Bolstered Prospects

Two-thirds of bachelor’s degrees in the United States are awarded by public universities.³ College-educated workers enjoy a substantial earnings premium. On an annual basis, median earnings for bachelor’s degree holders are $40,500 or 86 percent higher than those whose highest degree is a high school diploma.⁴ The earnings gap between college graduates and those with less education continues to widen. In 2023, median income for recent graduates reached $60,000 a year for bachelor’s degree holders aged 22–27. For high school graduates the same age, median earnings are $36,000 a year.⁵ Eighty-seven percent of bachelor’s degree holders report financial wellbeing, 20 percentage points higher than groups with any other level of education.⁶

Recent college graduates also weathered the Great Recession far better than their peers with a high school diploma. Today, the jobless rate for bachelor’s degree holders is less than 3 percent.⁷ And the incidence of poverty among bachelor’s degree holders is 3.5 times lower than it is for those who hold high school degrees.⁸ A college education is expected to become even more valuable. Over the past decade, all net job growth has gone to workers with bachelor’s degree or graduate degrees.⁹

Additional Benefits to Graduates

Of course, a college education is about more than just securing a job and a steady income. Consider health and safety, prerequisites for leading a fulfilling life. Bachelor’s degree holders are 47 percent more likely to have health insurance provided through their job and their employers contribute 74 percent more to their health coverage. Life expectancy is also longer for those who attend college. Studies suggest that those who have attended at least some college can expect to live seven years longer than their peers with no postsecondary education.⁸

1. Bureau of Labor Statistics, Unemployment rates for persons 25 years and older by educational attainment.

2. Georgetown Center on Education and the Workforce, The College Payoff, 2021.
3. National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS); 2021-22
4. U.S. Bureau of Labor Statistics, Quartiles and Selected Deciles of Usual Weekly Earnings by Educational Attainment, 2024.
5. “The Labor Market for Recent College Graduates,” The Federal Reserve Bank of New York,” 2022.
6. Federal Reserve Report on the Economic Well-Being of U.S. Households page 6
7. U.S. Bureau of Labor Statistics, Unemployment Rate – College Graduates – Bachelor’s Degree, 25 years and over, retrieved from FRED, Federal Reserve Bank of St. Louis, 2022.
8. Trostel, Lumina Foundation, “It’s Not Just the Money,” 2015.
9. U.S. Bureau of Labor Statistics, Current Population Survey