Department of Labor Logo United States Department of Labor
Dot gov

The .gov means it's official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

Https

The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Beyond BLS

Beyond BLS briefly summarizes articles, reports, working papers, and other works published outside BLS on broad topics of interest to MLR readers.

January 2025

The economics of education in 12 facts

Summary written by: Justin Holt

In the aggregate, education is correlated with the development of skills that drive economic growth over the long term. Individually, people with higher levels of education, when compared with people with less education, have higher wages, longer lives, greater productivity, better health, less unemployment, and greater feelings of fulfillment.

Sofoklis Goulas in “Twelve facts about the economics of education” (Brookings Institution, June 2024) considers the benefits, statuses, social inequalities, and future possibilities of education. Goulas’s article considers 12 facts about the economics of education, and these facts provide a broad array of information on student performance, international comparisons, technological innovations, and costs and benefits.

Since the turn of the millennium, the academic performance of students in the United States has been relatively stagnant, but completion rates for secondary education (high school) have increased. In 2022, the reading performance of 8th grade students was lower than 25 years ago, but the students’ performance in mathematics had slightly increased. From 2011 to 2022, the high school graduation rate for all students has increased from 79 to 87 percent. Nevertheless, White students are still more likely to complete their high school education than Black and Hispanic students are.  

The postsecondary performance of students in the United States has shown marked improvement. The share of the overall population with bachelor’s degrees has increased from 17.7 percent in 2002 to 23.4 percent in 2022. But racial gaps in postsecondary educational attainment persist. Black and Hispanic students are 34.0 percent and 50.4 percent, respectively, less likely to complete postsecondary degrees than White students are.

Goulas shows that the net cost of college is lower than the published price for both public and private colleges after accounting for grants, workstudy funding, and financial aid other than loans. The net cost of a bachelor’s degree at a private college is about 42 percent less than the published price, and the net cost at a public college is about 30 percent less than the published price. Still, most undergraduate students have unmet financial need.

Generally, people with higher levels of education have higher median real earnings, and Goulas shows that men earn more than women at all levels of education. These pay gaps partially reflect the different occupations that men and women commonly pursue, but women are paid less than men even within the same occupation. For example, the pay of female engineers is 90 percent of the pay of male engineers. In addition, the pay gap between women and men is greater for jobs that have longer work hours and nonstandard work schedules.

Sofoklis Goulas provides a detailed and succinct overview of the economics of education. Because the article does not consider causation in depth, it raises several avenues for research into why certain outcomes, such as longevity and feelings of fulfilment, are correlated with greater amounts of completed education.