California reaps $4.50 in benefits — higher taxes and less social welfare spending — for every $1 invested in the state’s universities, concludes California’s Economic Payoff: Investing in College Access & Completion, a Berkeley report for The Campaign for College Opportunity. The study did not look at the state’s investment in community colleges.
The return for college graduates is $4.80, twice the return for those who complete some college but don’t earn a degree.
In 20105, relative to those with only a high school degree, those completing at least a Baccalaureate of Arts (BA) can expect to spend an additional seven years working. While working, they will earn more; between the ages of 25 and 64 they can anticipate earning an additional $1.3 million in wages and salary, and receive more than an additional $1.5 million in total personal income, which includes all other income from sources such as rentals, investments, or transfer programs.
These college “completers” will also put fewer demands on the state’s safety net. On average, they are likely to spend two fewer years receiving aid, four fewer years in poverty, and will spend 10 fewer months incarcerated. As might be expected, the recession has widened the gulf between the more highly educated and those with only a high school degree (or less).
Of course, there’s a big difference in academic performance and motivation between people who never enroll in college, those who start but don’t finish and those who earn a bachelor’s degree. If more low-achieving students enrolled in college or more marginal students completed a degree, they wouldn’t be likely to do as well as the high achievers.