Impact of Education on Income
Have you ever applied for a job that required a high school degree? Are you going to college in part because you realize you will need a college degree for a higher-paying job? As these questions imply, the United States is a credential society (Collins, 1979). [11] This means at least two things. First, a high school or college degree (or beyond) indicates that a person has acquired the needed knowledge and skills for various jobs. Second, a degree at some level is a requirement for most jobs. As you know full well, a college degree today is a virtual requirement for a decent-paying job. The ante has been upped considerably over the years: In earlier generations, a high school degree, if even that, was all that was needed, if only because so few people graduated from high school to begin with. With so many people graduating from high school today, a high school degree is not worth as much. Then too, today’s society increasingly requires skills and knowledge that only a college education brings.
A credential society also means that people with more formal education achieve higher incomes. Annual earnings are indeed much higher for people with more education (see ). As earlier chapters indicated, gender and race/ethnicity affect the payoff we get from our education, but education itself still makes a huge difference for our incomes.
Figure 11.5 Educational Attainment and Median Annual Earnings, Ages 25–34, 2009
Source: Aud, S., Hussar, W., Kena, G., Bianco, K., Frohlich, L., Kemp, J., et al. (2011). The condition of education 2011. Washington, DC: National Center for Education Statistics.
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