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Pay Gap Between College and High School Grads Never Been Larger

February 16, 2017

To do list for high school gradsThe earnings gap between those with a college degree versus those with a high school degree has never been wider, according to a recent article by the Associated Press. On average, college grads earned 56 percent more than high school grads in 2015, according to an analysis conducted by the Economic Policy Institute (EPI). This has increased from 51% in 1999 and is the largest gap since the EPI started collecting data in 1973.

Further, since the end of the recession in 2009, college graduates have secured a significantly higher percentage of new jobs along with pay gains. By contrast, non-college graduates have faced a shortage of employment opportunities along with a 3% decline in their income. Just two-thirds of adults with high school-only degree aged 25 through 64 were employed in 2015, a steep drop from the 73 percent employment rate in 2007. For college graduates in the same age range, the employment rate fell just slightly from 84 percent to 83 percent.

“College grads earned 56 percent more than high school grads…”

College grads have traditionally earned more than those with less education. As the pay gaps widen, however, it is affecting lives beyond just income, including lower levels of home ownership, geographic mobility, marriage rates and age and quality of retirement.

College grads are also far more likely to have access and contribute to a 401(k)-style retirement plan. In 2015, college graduates contributed 26 percent more to their retirement savings even when individuals from both groups had similar income levels and similar access to these plans.

It’s increasingly clear that high school grads need to continue beyond high school to acquire the skills needed for higher-paying work. Though many middle-income jobs don’t require a bachelor’s degree, nearly all of them require some post-high school education or training, such as an associate degree.