Returns to Education

(Image Source: MD Duran / Unsplash)

Wisconsin IDEA

Insight • Data • Economics • Analysis

Lifetime Earnings Increase from $1.60 million for a HS degree to Almost $2.5 million for Bachelor’s

Does the return to higher education justify the rising costs to students, particularly considering the current tight labor markets? Using the most current Census data for Wisconsin, the average earnings, regardless of educational attainment, is $50,039. When examining the Wisconsin-wide average across different levels of educational attainment, there is a clear upward movement as education increases.

For example, average earnings for a working person with only a high school degree (inclusive of GED equivalency) is $40,104, but for those with some college or two-year associate degree the average increases to $45,729, and for a bachelor’s degree the average increases to $61,428. Assuming a 40-year working career, and adjusting for years out of the labor force while pursuing higher education, the simple lifetime earnings go from $1.60 million for a high school degree to $1.73 million for an associate degree to almost $2.5 million for a bachelor’s degree. There are exceptions to this general pattern. For example, a plumber in Wisconsin, which requires a high school, or equivalency, as well as a training apprenticeship, has median earnings of $71,690 in 2022. An early childhood education (preschool and daycare) administrator, which tends to require a bachelor’s degree, has median earnings of $46,910.

Figure 1. Returns to Educational Attainment for Wisconsin Residents: 2022

There is evidence of a gender wage gap with the average for men being $56,462 but only $41,920 for women that is persistent across educational attainment levels. While women’s average earnings increase as education increases, the “gender gap” remains. For those with only a high school degree, men’s earnings are, on average, 33.7 percent higher than women, and for those with a bachelor’s degree men earn 28.8 percent more than women. This means that the decision to invest in education does have a gender dimension. Whether this increase in average earnings from pursuing higher education justifies the associated costs is a decision unique to each person.

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