Educational Payoffs

 
-Source: National Center for Educational Statistics

Mean Earnings of Men

• Between 1978 and 1992, after adjusting for inflation, the mean annual earnings of men who did not complete high school fell by about 23% net for whites and Hispanics, but by only about 3% for blacks. These declines were almost counterbalanced during the economic expansion between 1992 and 2000, when earnings grew about 19% for whites and 21% for Hispanics who did not complete high school, but by only  5% for blacks.

• The period of declining or stagnating wages for black men without high school degrees actually started earlier than for comparable whites and Hispanics, and lasted a year longer.  From 1976 to 1993 their earnings fell about 7%, before growing nearly 9% between 1993 and 2000.  However, these declines were less than half of those for whites and Hispanic dropouts.

• From 1976 to 2000, the earnings of men without high school diplomas dropped a net of 2% for whites and Hispanics, and increased by less than 1 percent for black men.  In contrast, the earnings of men with high school degrees increased by nearly 14% for blacks and 10% for whites from 1976 to 2000.  Hispanic male high school graduates had about the same median earnings in 2000 as in 1976. 

• Gains in earnings increased with educational attainments for men.  The median earnings of white, black and Hispanic men with some college or associate arts degrees were 24% to 26% higher in 2000 than in 1976, and the earnings of men with bachelor’s degrees increased by 40% for blacks and whites, and by 30% for Hispanics during the period.  Among those with advanced degrees, median earnings increased by 57% for whites and Hispanics from 1976 to 2000, and by 47% for blacks.

• Black and Hispanic men earned less annually, at all educational levels, than comparably educated white men, in part due to working fewer weeks and hours.  Racial gaps narrowed at some educational levels from 1976 to 1996, but ended the period at the same or higher levels in others.  The gaps among those who did not complete high school were smaller in 2000, when blacks earned 79.3% and Hispanics 87.5% of the white median, than in 1976, when blacks earned 74.9% and Hispanics 85% of the white median.  Black male high school graduates also closed the gap with comparable whites, earning 75.7% of the median for whites in 2000, compared to 71.6% in 1976.  However, Hispanic male high school graduates were farther behind in 2000 than in 1976, earning only 75.7% of the white median in 2000, down from 82.6% in 1976. 

• Black men with some college or associate arts degrees ended the period earning closer to comparable whites (78.4%) than in 1976 (71.6), and so did Hispanics (79.6 vs. 77.8).  Black college graduates ended the period where they started (at 71.3% of the white median), and Hispanics fell further behind, falling from 80.2% of the median earnings of whites in 1976 to 74.9%.   Among those with advanced degrees, however, Hispanics ended the period earning the same percentage of the white median as they began (82.9%), while the gap grew among blacks, who earned 76.8% of the white median in 1976, but only 69.9% in 2000. 

• At every level, additional education paid off in higher earnings, and the payoffs have grown.  Black men who completed high school earned 22% more than dropouts in 1976 and 44% more in 2000. Those who completed some college earned over 8% more in 1976 than black men who only finished high school, and 19% more in 2000.  A black male with a bachelor’s earned 51% more than one who completed only some college in 2000, up from 37% more in 1976. Black men with advanced degrees earned 35% more than those with a bachelor’s in both 2000 and 1976. The higher earnings posted by those with higher levels of education were comparable for white and Hispanic men.  However, Hispanics who completed high school had smaller increases over those who did not (31%) than did blacks (44%) or whites (51%).   However, Hispanics who completed advanced degrees gained more over those who completed bachelor’s degrees (55%) than did their black (37%) or white (40%) counterparts
  

-Source: National Center for Educational Statistics

Mean Earnings of Women

• Black, Hispanic, and white women with some college or more earned at least 15% more in 2000 than in 1976.  However, black women’s gains during the period of 7% for high school graduates, 23% for some college, 20% for bachelor’s, and 16% for those with advanced degrees were substantially smaller than gains for whites (21%, 35%, 49% and 53%) and Hispanics (13%, 29%, 41%, and 78%).  Only among high school dropouts did earnings for black women grow more (16%) than they did for Hispanic (10%) and white women (2%).
  

• In contrast to men, comparably educated black, Hispanic and white women have had relatively equal earnings.   Among female high school graduates, the black-to-white earnings ratio fell from 98% in 1990 to 92% in 1996, and the Hispanic-to-white ratio fell from 95% to 91%.  Among dropouts, Hispanic women earned 71% of what white women earned in 1990, but reached virtual parity (99%) by 1996.  Black women with some college, bachelor’s, or advanced degrees earned 15% to 20% more than comparably educated white women in 1976, but these ratios fell to near parity by 1990.
  
  

-Source:  National Center for Educational Statistics

Stability of Employment

• Additional education also pays off in more stable employment and fewer weeks spent unemployed or out of the labor force.  A longitudinal study collected data on the employment
  experiences of adults who were 31 to 38 years old between 1991. The average number of weeks employed grew at each additional level of education for whites, blacks, and Hispanics. 

• Blacks who did not complete high school spent more than half of each year, on average, either unemployed (5 weeks) or out of the labor force (22 weeks).  White (16 weeks) and Hispanic (19 weeks) dropouts spent closer to a third of each year without employment.  Blacks who completed high school spent only half as many weeks (11) out of the labor force as black dropouts (22), but still worked fewer weeks (37) on average each year than white (42) and Hispanic (40) high school graduates.  Blacks with high school equivalency diplomas worked 30 weeks—7 weeks fewer than black high school graduates, but about 5 weeks more than black dropouts.

• Racial and ethnic gaps in weeks worked were smaller among the more educated.  Blacks who completed some college were unemployed (3 weeks) or out of the labor force (8 weeks) almost one quarter of each year, while those who earned a BA degree or more were employed 90% of the time (47 weeks) about 1 week more than white and Hispanic college graduates. 

• Most blacks who did not complete high school (60%) or who earned an equivalency diploma (67%) experienced at least one spell of unemployment between 1991 and 1995, as did about 50% of comparably educated whites and Hispanics.  Among high school graduates, 52% of blacks, 45% of Hispanics, but only 36% of whites experienced unemployment. These percentages fell to 43% of blacks, 32% of whites, and only 25% of Hispanics who completed some college, and about one quarter of blacks (28%) and whites (24%) with BA degrees or more.
  

 

References

Bureau of Labor Statistics.  Number of Jobs, Labor Market Experience, and Earnings Growth: Results From a Longitudinal Survey Summary. http://www.bls.gov/news.release/nlsoy.nws.html

National Center for Educational Statistics. The Condition of Education 1997.  Annual Earnings of Young Adults, by Educational Attainment., Indicator 33.  http://www.nces.ed.gov/nces/pubs/ce/c9733a01.html

Prepared by Cassandra Cantave and Roderick Harrison for the Joint Center for Political and Economic Studies. Updated August 2003. 

 

Printer Friendly Version