The Varied Economic Returns to Postsecondary Education: New Evidence from the Class of 1972

This paper estimates the returns to postsecondary education using the National Longitudinal Survey of the Class of 1972, with earnings measured at about age 32. The results are based on transcripts, rather than self-reports about the amount of education, allowing postsecondary education to be more precisely described than usual. The results confirm the well-known returns to B.A. degrees. Other credentials-associate degrees, and certificates for women-also lead to higher earnings and wage rates, though indirectly: these credentials gain individuals access to jobs where they accumulate more experience and on-the-job training, but provide no further advantage once experience and OJT are controlled. Most individuals who enroll in postsecondary education but fail to complete credentials have no higher earnings than high school graduates. The effects of experience, high school achievement, and family background are familiar. The results indicate a fundamental difference between labor markets for college graduates and the sub-baccalaureate labor market.