From Federal Reserve San Francisco research paper “Does College Pay?”

Questions for students:

• How would you define “Earnings Premium” in your own words?
• Why do you think this premium exists?
• You notice that a friend you grew up with who took a job after high school is earning almost as much as you are after finishing college. Should you be worried that a college degree isn’t worth what it used to be?
• What is the headline that you would use to describe this graph and the relationship between earnings premium and career progression (in years)?
• Do you think this premium will change in the future? Why?
• This graph shows one element of whether college is worth it. What is the other factor that needs to be considered?

Want this resource and questions in slide format to use in class? Click here!

Additional current resource:

• May 2016 NY Times: “It’s A Tough Job Market For The Young Without College Degrees”

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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