"Financial Literacy and High-Cost Borrowing in the United States." The level of income one can earn post-university is perhaps the easiest to measure return on investment in education. But, if someone in the “no high school diploma” category went on to obtain their high school diploma or a GED, they’d have the potential to earn close to $8,000 more per year and see their chances of unemployment drop by almost 2 points. On The Economy (blog); June 30, 2016; https://www.stlouisfed.org/on-the-economy/2016/june/how-has-income-inequality-changed-years. A consistent finding among studies using instrumental variables based on institutional changes in the education system is that the estimated returns to schooling are 20–40% above the corresponding OLS estimates. Learn how the World Bank Group is helping countries with COVID-19 (coronavirus). The short answer to that question is yes. Income and wealth inequality have been on the rise in the United States for decades. Wealth Distribution Is Unfair." The latest data collected from the states by the National Center for Education Statistics (NCES), show that 51 percent of the students across the nation's public schools were low income in 2013. The unemployment rate for college graduates was 2.3 percent, while that for those with less than a high school diploma was 7.9 percent. Financial literacy: Having knowledge of financial matters and applying that knowledge to one's life. If you already have an associate’s degree, then getting a bachelor’s degree could potentially yield an $18,000 increase in your salary. Asset: A resource with economic value that an individual, corporation, or country owns with the expectation that it will provide future benefits. You’ll also see your job security increase a bit. Education can change lives, but it can also change one’s economic circumstances. Will Flexibility and Change Define the ‘New Normality’ at the Workplace Post Covid-19? © 2017, Federal Reserve Bank of St. Louis. For instance, education plays an important role in a variety of domains, including economic growth, wages, income inequality and society. Copyright © 2020 Elsevier B.V. or its licensors or contributors. 15 Brown, Alexandra; Collins, J. Michael; Schmeiser, Maximilian and Urban, Carly. Required fields are marked *. What Will the Military Be Like in the Future. 11 Moore, Danna. Part of the explanation for this finding may be that marginal returns to schooling for certain subgroups – particularly relatively disadvantaged groups with low education outcomes – are higher than the average marginal returns to education in the population as a whole. There are several other benefits to obtaining a college degree that should be considered. Education is Important for your future career! However, better health could help people become more educated. Factors such as natural ability and family background also impact both income and wealth and are not caused by having more education (see the boxed insert). One important reason for the increase is that poor families invest relatively less in children's early education than do wealthy families; therefore, their children attend lower-quality schools, which results in them being much less likely to participate in higher education.