Friday, September 25, 2009

U.S. College Degree: Return on Investment

Something got me wondering about the "Return on Investment" of a college degree the other day. I think the best way to look at ROI on education is to see how many years the College Graduate can expect to be employed before being replaced.

The yearly average shortfall in College Graduate employment is 451,824. Persons reaching retirement age is now at 16.12% (up from 15.69% end of 1992). This (16.12% retirement rate) would put the employment shortfall for college graduates at 378,986 per year. Assuming that all 1,493,000 new class of 2009 college graduates are interested in working, this would create an "non-emloyment" rate of 25.38%.

In 2006 Occupational shock to the economy from high-skill temporary visas are as follows:

H-1B Specialty occupations requiring bachelor’s equivalent = 135,421
L-1 Intracompany transfers = 72,613
O-1 People of extraordinary ability = 6,961
O-2 Workers assisting O-1 = 3,726
TN NAFTA high-skilled visa (most from Canada) = 2,972

Total high skill visas (generally require a Bachelors): 221,693

If we remove these temporary visas, the "non-employment" rate would fall to

Period 1993 to 2009 (Aug.)

Avg. Increase in College Graduates = 1,418,588
Avg. Increase in College Grad Employment = 966,765

Total increase in College Grads = 24,116,000
Total increase in CG employment = 16,435,000

Divide (increase in CG emp) by (yrly avg increase in CGs)

(16,435,000 / 966,765)

Avg Length of College Graduate (employment) career = 11.58 years

BLS - CPS Data:
College Degrees

Series title: (Seas) Population Level - Bachelor?s degree and higher, 25 yrs. & over
Series title: (Seas) Employment Level - Bachelor?s degree and higher, 25 yrs. & over


Series title: (Unadj) Population Level - 65 yrs. & over
Series title: (Unadj) Population Level

1 comment:

Anonymous said...

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