Community College Educations Pay Off In The Labor Market

With the cost of a college education soaring ever higher, it's hardly surprising that roughly half of students entering college today do so at a low-cost community college. Many critics have charged, however, that such two-year colleges provide inferior educations that aren't worth the investment.

Evidence from the marketplace disagrees. A new National Bureau of Economic Research study not only confirms earlier findings that those who completed one or two years of college earn more than high school graduates. It also finds that this is as true for former students of two-year colleges as for those who studied at four-year schools.

In the study, which examined how much two- and four-year college students in the 1970s were earning in 1986, economists Thomas J. Kane and Cecilia Rouse found no significant difference in the wages of former students with similar abilities and backgrounds who had completed a similar number of credits. On average, two-year and four-year college students both earned about 5% more than high school students for every year of credits completed.

Kane and Rouse conclude that going to college pays off about the same whether one attends a two-year or four-year institution. At either type of institution, the more semesters of study a student successfully completes, the higher his eventual earnings.

Before it's here, it's on the Bloomberg Terminal.