Analysis of Labor Market Returns to College Degrees in Economics

This paper examines the labor market returns to a college degree, focusing on how these returns have changed over time. It highlights the increasing importance of higher education in a rapidly evolving job market where low and middle-skilled jobs are disappearing. The review delves into existing literature, exploring the relationship between education and earnings, income inequality among college students, and the impact of economic crises on labor market prospects. It references studies that show a positive correlation between educational attainment and earnings, with community colleges offering diverse opportunities for human capital development. The paper concludes that a college degree or higher education remains a significant factor in achieving better labor market outcomes, influencing career opportunities, earnings, and overall financial well-being.

Running head: ECONOMICS
Economics
Name of the student
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ECONOMICS
What are the labor market returns to a college degree and how have they changed over
time?
The paper is about the returns of the labour market to a college degree. In the rapidly
changing labour market, the low as well as the middle skilled jobs are going to disappear
soon. Therefore enhancing the job opportunities through the higher education have become
one of the biggest policy objective. The concern related to the outcomes of the labour market
of various college degrees can be more pressing for students from the disadvantaged
backgrounds.
Therefore, the main idea of the term paper is to find out how the college degree and
higher education affects the labour market. It states the importance of education in the labour
market. since, it have been found out that additional education beyond the high school
usually leads to high earnings. It also offers wide range of career opportunities. A better
informed person is also known to make better financial as well as professional decisions.
Education most importantly is known to play an important role in the outcomes of the labour
market which is also known to influence the sectors in which people work along with the
benefits they receive.
Many researchers have known to study the relationship between the earnings and the
schoolings. The researchers have also found out that the workers with high educational level
are known to have high earnings. The community colleges are also the diverse institutions
which have known to offer several opportunities for various people in order to gain human
capital where they also offer various awards such as degrees, certificates and diplomas.
Researchers have recently studied on the labour market reforms for the community colleges
and also have focussed on the returns of the associate degrees. The research question is there
for "What are the labor market returns to a college degree and how have they changed over
time?"
There have been many research which have taken place previously works shows
income inequality are known to present among the college students. The kind of literature
works that can be looked back are the changes shaping the labour market and the relation
between the wages and employment. The worldwide crisis of the economy has known to alter
the labour market prospects of the workers. The research have also proved that low skilled
workers are known to be vulnerable in nature and they will be having high unemployment
and lower wages than the educated workers.
Previous works shows the relationship between the earnings and schoolings. In this
paper . Christopher Jepsen have known to summarize the literature based on the labour
market returns to schooling. He has also known to compare the labour market returns
between the private as well as between public colleges using the fixed effect models. The
researcher has found that there is presence of small and insignificant differences between the
labour market returns from the private as well as public community colleges. In this article, it
was also stated that degrees and diplomas lead to earnings return of nearly $2000 more
women and $1500 in case of men (Belfield and Bailey 2017). The community colleges are
also the diverse institutions which have known to offer several opportunities for various
people in order to gain human capital where they also offer various awards such as degrees,

ECONOMICS
certificates and diplomas. Researchers have recently studied on the labour market reforms for
the community colleges and also have focussed on the returns of the associate degrees.
Another work of income inequality among the college students showed that that there
is presence of income inequality among the college students and inequality in the
occupational status over time. The studies made in some of the colleges in New York have
shown that specific degrees are known to benefit at the point of entry into the labour market,
however found to be the lowest growth in the occupational status over time (Dadgar. and
Trimble 2015). However, in the modern economy college degrees college graduates have
known to be the winners. The high demand for the educated workers with the slowdown of
the supple of the students lead to sharp increase in the wage of the college degrees in most of
the colleges of the United States of America.
The previous work on this topic have showed that economic returns in completion of
a four year college degree will be giving high economic returns. A study has been performed
on the students from the National Student Clearinghouse where it has been found out that the
associate degrees are strongly and positively related and also statistically significant across
each of the state (Roksa & Arum 2015). It has been also found out that the earnings are
specifically much higher in case of men. The paper The Labour Market Returns to Sub-
Baccalaureate College which have been reviewed by Clive Belfield have shown that there is a
positive return for human capital accumulation in college even in cases student does not
complete an award (Xu and Trimble 2016). However, the author has found out that there is a
presence of significant differences in earnings gains. The paper has also stated that when the
field of study is more general is nature, the disparity present between vocational as well as
academic discipline is clearer in nature. The recent studies have also proved that fact there are
incremental returns to investment in colleges. Therefore, in order to conclude it can be said
that college degree or higher education is an important factor in the labour market.

ECONOMICS
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