Educational achievement continues to represent the most obvious way to attain prosperity in America. A new study by MIT profession David Autor indicates that in 2012, a typical family of graduates from a four year college earned about $58,000 more than a family of high school graduates. The payoff from a college degree is nearly twice as large as it was in 1979. One of the reasons for this enormous payoff is that not enough Americans end up earning a college degree, serving to increase the value of those who have one. Employers have been complaining for years about a lack of skilled workers and these complaints appear to be grounded in reality.
According to the Organization for Economic Cooperation and Development, the skill level of the American workforce has slipped dangerously behind other nations. Remarkably, despite the value of a college degree, only about half of high school graduates from low income families enrolled in college in 2012 compared with 80% for high income families. Only a small share of those low income young people going to college manage to finish. Research from the University of Michigan indicates that the college graduation rate for Americans from the bottom quarter of the income distribution is only 9%.