Justin Wolfers: Newsweek Cover Story On College Lacks 'Evidence'

Newsweek just published a cover story arguing that college is not worth it for many young people. But there is little evidence to support that claim.

Megan McArdle, a special correspondent for Newsweek, argued in the cover story that for a growing number of young people, college is becoming too expensive and "is less about providing an education than a credential."

Justin Wolfers, an economics professor at the University of Michigan, criticized the article Sunday on Twitter:

Reached by email, Wolfers noted studies have shown that "each year of study boosts your earnings by 8% on average, per year, for the rest of your life. That's pretty healthy."

McArdle wrote that the sticker price of a college education has nearly doubled since 1995, but Wolfers noted that after scholarships and financial aid, the "actual price" of higher education "hasn't been rising anywhere nearly as quickly" as the sticker price of a college education. He added that McArdle's numbers on student debt are "alarmist" and "the actual numbers are far lower."

There is a slew of evidence demonstrating that college is worth the investment. A bachelor's degree is worth $2.8 million in higher earnings over the degree-holder's lifetime, according to a Georgetown University study. In contrast, the average four-year private college cost $130,468 over four years, measured in 2010-2011, and the average four-year public college cost $63,672.

Most recent high school graduates not in college are unemployed, and those with jobs are getting paid barely enough to stay out of poverty, according to Rutgers University. Recent college graduates, on the other hand, are less likely to be unemployed and make more money on average: trends that continue for college degree-holders over their lifetimes.

Among workers age 25 and older, the unemployment rate for college graduates was just 4.1 percent in August, less than half the 8.8 percent unemployment rate for high school graduates with no college education.

College graduates also have more bargaining power with employers, which can come with benefits. For example, 72 percent of employed college graduates had access to paid time off last year, according to the Labor Department. In contrast, 61 percent of high school graduates without a college education and 35 percent of high school dropouts had access to paid leave.

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