The college payoff: ROI and economic mobility

We’ve rounded up the latest research on college ROI and economic mobility so you don’t have to.

The country has learned a lot about the return on investment for college in the past few years, as national program-level datasets have come online and state longitudinal systems have come into their own.

Work Shift regularly writes about the latest research, and the number of large or otherwise path-breaking studies has continued to grow—so much so that we’ve been having a hard time keeping track. We thought you might be experiencing that too, so we’ve pulled some of the more noteworthy studies into one dedicated spot.

  • This does not attempt to be a comprehensive list of all college ROI research.
  • It is an overview of the reports researchers, policymakers, and college faculty and staff are most likely to be talking about.
  • It has a particular focus on studies that view ROI through the lens of equity and economic mobility.

This is a living document, so check back and feel free to make suggestions of research we should add. And if you’re looking for our original article on this topic, “Does college pay off?,” you can find it here. This round up was originally published February 8, 2022. It was last updated September 27, 2023.

Deep dive: Studies we’ve covered

The following are studies Work Shift has written about in some depth. Those write-ups are linked.

+Ranking by economic mobility. Out With the Old, In With the New: Rating Higher Ed by Economic Mobility,” Third Way, January 2022.

Third Way ranks 1,320 bachelor’s degree-granting institutions based on an Economic Mobility Index. It starts with a price-to-earnings premium calculation that looks at how long it takes low-income students to recoup their educational costs. Then, the index includes the proportion of Pell Grant recipients the institutions enroll to arrive at a final economic mobility rating. Jon Boeckenstedt, of Oregon State University, created a visual tool for viewing the data. (Full coverage in The Job newsletter here.)

+ROI by program. Which College Programs Give Students the Best Bang for Their Buck?,” Third Way, August 2021.

Third Way Education looked at the ROI of certificate, associate, and bachelor’s degree programs, using College Scorecard Data. It found a wide variation depending on the specific area of study, even among credentials within the same broad field, like allied health. (Full Work Shift coverage here.)

+More education, more earnings? The college payoff: More education doesn’t always mean more earnings,” Georgetown University Center on Education and the Workforce, October 2021. 

This study from CEW put new numbers to the fact that, while most college graduates earn more than those with only a high school education—some do not. The researchers found that 16 percent of high school graduates actually earn more than what the bottom half of workers with a bachelor’s degree do. (Full Work Shift coverage here.)

+The primacy of program mix. Student outcomes at community colleges: What factors explain variation in loan repayment and earnings?,” Brookings Institution, September 2021. 

The study from Brookings focused on community colleges, and showed just how much what a student studies matters when it comes to earnings. Earnings and loan repayment rates varied significantly across demographic groups, and the field of study explained most of that variation. The researchers found that underrepresented minority students are disproportionately enrolled in fields that tend to pay less. (Full Work Shift coverage here.)

+Low wage, high value jobs. “Exploring the importance of low wage, high social value careers,” Postsecondary Value Commission, October 2021.

This paper features an overview of research on low-wage jobs that nevertheless provide a high value to society and, in many cases, the individuals that hold them. It finds that low-wage, high-value fields are dominated by women and people of color. Data from the Bureau of Labor Statistics, highlighted in the report, shows just how lopsided the workforce is in those jobs. (Full Work Shift coverage here and here.)

+Payoff of work experience.Human capital at work: The value of experience,” McKinsey & Company, June 2022.

This analysis explores how formal education and on-the-job experience interact to help people increase their skills and their income. The researchers at McKinsey examined more than 410,000 lifetime earnings records in the United States, and they found that work experience, as opposed to education and baseline skills, accounted for 40 percent of workers’ total earnings. Work experience was even more important for Americans without degrees and those starting in low-paying jobs. (Full Work Shift coverage here.)

+What matters in a college? The returns to college(s): Relative value-added and match effects in higher education,” NBER Working Paper Series, September 2021.

This NBER paper, using data from Texas, focused on what institutional characteristics—selectivity, academic and student support spending, faculty mix—are factors in whether a college adds value or simply produces the results that would be expected given their student body. The researchers found that institutional selectivity was not correlated with added earnings over the long-term, but institutional resources were. (Full Work Shift coverage here.)

Other go-tos: Studies we talk about a lot

The following are studies Work Shift hasn’t written about, per se, but that we find ourselves referencing all the time.

+[NEW] Race and mobility.Race and Economic Mobility (REM): College Value for Students of Color Across Sectors,” The Institute for College Access and Success, September 2023.

+Returns amid rising costs.Is College Still Worth the High Price? Weighing Costs and Benefits of Investing in Human Capital,” PAGE ONE Economics from the Federal Reserve Bank of St. Louis, September 2023. 

+Wealth Premium.Is College Still Worth It? The New Calculus of Falling Returns,” Federal Reserve Bank of St. Louis REVIEW, Fall 2019

+Gold standard on economic mobility. All the education research from Opportunity Insights, but especially this seminal report: “Mobility Report Cards: The Role of Colleges in Intergenerational Mobility,” December 2017, and the related data visualizations published by The New York Times.

+Gold standard on ROI. Two studies from the Federal Reserve Bank of New York: “Despite Rising Costs, College Is Still a Good Investment,” June 2019, and “College May Not Pay Off for Everyone,” September 2014.

+Value in higher education. All the research from the Postsecondary Value Commission, but especially the group’s final report: “Equitable value: Promoting economic mobility and social justice,” May 2021.

+ROI by public, private, for-profit status.Which Colleges Are Worth the Cost?,” Bipartisan Policy Center, February 2022.

+Family income and ROI.The Colleges Where Low-Income Students Get the Highest ROI,” January 2022.

+ROI by major. For bachelor’s degrees: “Is College Worth It? A Comprehensive Return on Investment Analysis,” Foundation for Research on Equal Opportunity, October 2021. For associate degrees and certificates: “Is Community College Worth It? A Comprehensive Return on Investment Analysis,” FREOPP, March 2022.

+ROI by major for low-income students. The Colleges and Majors That Deliver Economic Mobility for Low-Income Students,” The Foundation for Research on Equal Opportunity, March 2023.

+Which new grads are getting jobs.First Destinations for the Class of 2020: Findings and Analysis,” National Association of Colleges and Employers, November 2021. The report and interactive dashboard.

+American’s views on higher ed’s payoff.America’s Hidden Common Ground on Public Higher Education: What’s Wrong and How to Fix It,” Public Agenda and USA TODAY Hidden Common Ground research, July 2022.

+Alumni perspectives on value.From College to Life: Relevance and the Value of Higher Education,” Strada Education Network and Gallup, May 2018. (Strada is a funder of Work Shift.)

+For-profit alumni’s views on value.Who Profits? Students’ Experiences at For-Profit Colleges,” Public Agenda, January 2023. 

+Online education.A Better Deal? Comparing Alumni’s Experiences with Online Degrees at For-Profit and Nonprofit Colleges,” Public Agenda, March 2023.

+The ROI of student supports.An Intervention Return on Investment Tool for Community Colleges,” MDRC, 2022. (This differs from the other ROI research here, in that it focuses on the return that colleges themselves can expect to see—from increased tuition revenue and other funding—from investing in student support programs like enhanced advising and tutoring. In other words: it’s the college’s ROI for boosting student ROI.)

This round up was originally published February 8, 2022. It was last updated September 27, 2023.

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