A stronger link between degrees and dollars

Sometime in the 1990s, the ladder to success got longer for America's children.

Parents began tacking on a year or two of prekindergarten. Employers began demanding advanced degrees beyond college. Where once a dozen years of school sufficed for a good job, now youngsters are staring at a minimum 18-year stint – preschool through college – to launch a successful career.

And even that may not be enough.

A new report from the Census Bureau suggests that to make a really good income, today's young people may need 20 years or more in the classroom and an advanced degree. Such demands, daunting enough for students, may prove even more challenging for their parents, struggling to pay for extra schooling, and for universities, straining to provide it.

The United States may have to reexamine notions of what it takes to prepare young people for a career.

"Increasingly, a bachelor's degree is seen as a more generalist kind of degree," says Ron Bird, chief economist for the Employment Policy Foundation, a Washington think tank. "The demand for ... specially trained and highly skilled people is continuing to outstrip the supply."

The new dynamics in classroom tenure are evident at the earliest ages. Consider preschool. Once the preserve of only a few, today it's mainstream. Nearly two-thirds of 3- and 4-year-olds attend prekindergarten classes or day care with some sort of educational component, according to recently released census data.

As a result, the expectations teachers once had for first-graders are being shifted onto kindergartners. "Kindergarten is now first grade," says Dominic Gullo, professor of early-childhood education at the University of Wisconsin at Milwaukee.

A similar shift is happening at the college level. Once a badge of achievement, a bachelor's degree is now becoming merely the ticket of admission to the working world. "A bachelor's degree is clearly what a high school degree used to be in terms of basic education for an economy based on knowledge," says Nancy Goldschmidt, associate vice chancellor for performance and planning for the Oregon University System.

For years, experts have pointed to the economic importance of education. Studies have shown that college graduates, on average, have long made more money per year than the typical high school graduate.

In 1975, for example, college grads working full time and year-round averaged 50 percent more income than the typical full-time worker with a high school diploma. The worker with an advanced degree made an extra 20 percent over the college grad.

In 1991, however, the yardstick changed.

College grads still earned a big premium over the high school set. But those with advanced degrees earned even bigger premiums over college grads. That pay gap has yawned wider ever since.

By the late 1990s, the average full-time employee with a doctoral degree earned $89,400, according to a census report released today. That was $37,200 more than the typical college grad – a gap significantly larger than the $21,800 premium the college grad earned over the typical high school graduate. Professionals – meaning dentists, doctors, lawyers, and veterinarians – earned even more than doctoral-degree holders.

"The payoff is certainly there, and more so today than in the past," says Jennifer Day, coauthor of the new census report. "It's a payoff you have over your lifetime."

According to the report, the typical high school graduate can expect to earn $1.2 million after 40 years of full-time work. That's not bad. But it pales in comparison with better-educated workers. The average college grad can look forward to $2.1 million; the doctoral degree-holder, $3.4 million; and the professional degree-holder, $4.4 million.

True, college is far more common these days. Nearly 2 in 3 high school seniors go on to college the following year, according to the census report. But far fewer go on to master's programs.

In the late 1990s, graduate- school enrollments actually decreased, in part because the strong economy was luring college grads into the workforce. "When the dotcom boom was on, students wouldn't even complete their bachelor's studies," says Joe Merola, senior administrative fellow in charge of restructuring at Virginia Tech in Blacksburg.

Now, with a slower economy, experts say employers are becoming choosier. They're looking for young people with job experience or advanced degrees.

But that doesn't mean the job market will freeze out talented but less-educated individuals. "A college student or even somebody without a degree can be successful," Dr. Merola says. "We can point to Bill Gates."

Yet the averages suggest that for most young people, an advanced degree is becoming ever more important to getting ahead. "We could see people with bachelor's degrees having a harder time finding employment compared with three to five years ago," adds Dr. Goldschmidt.

Her own daughter, who enters high school this fall, is considering neurosurgery or law. She's "definitely going to college and going on" for a professional degree, Goldschmidt laughs. "She's read my reports."