The Value of College May Be Negative for the COVID Generation

Hey, Nnamdi here.

The value of a college degree is crashing toward zero and may even be negative for today's COVID-graduates.

This is the stunning implication of recent research by the Federal Reserve into the precipitously falling financial returns of higher education.

You might be thinking — “but I thought the benefit of a college degree has been increasing all this time?”

You would be wrong, though understandably so.

Here’s a sketch of the basic argument:
  1. College graduates continue to earn significantly more than non-college graduates
  2. However, the causal (key word) income effect of college has not increased and, if anything, has declined
  3. Meanwhile, the cost of attending college has ballooned
  4. As a result, the wealth-generating power of a college degree has evaporated
Let’s walk through these points, one by one.

Enjoy!

Nnamdi
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