College education in the United States continues to climb. Not all college majors are created equal if you’re looking to make the big bucks (specifically, these are the ones you should avoid if you want to make any money at all), but it seems like an agreed-upon fact that some sort of college degree is better for your bottom line than no college degree at all. But, according to The Atlantic, having a bachelor’s degree may not matter as much as one would think.
A new working paper by Jesse Rothstein, a professor of public policy and economics at U.C. Berkeley, takes a look at the role schooling plays in economic mobility. His work builds on previous research led by Ray Chetty, a professor of economics at Stanford, which pinpointed five factors, namely, segregation, family structure, local school quality, social capital, and income inequality, in a child’s ability to make progress relative to their parents’ financial standings. Parents, here’s how to save money for your child’s college education.
The Rothstein-led research team found that although schooling does play a role in someone improving their economic standing, it takes the backseat to other factors, via The Atlantic:
“[Rothstein] found that differences in local labor markets…and marriage patterns…seemed to make much more of a difference than school quality. He concludes that factors like higher minimum wages, the presence and strength of labor unions, and clear career pathways within local industries are likely to play more important roles in facilitating a poor child’s ability to rise up the economic ladder when they reach adulthood.”
For example, someone who grows up in Silicon Valley might have a higher inclination or opportunity to work in the tech industry, while someone who grew up in Hartford, Connecticut might have more an inclination or opportunity to work in insurance. When it came to marriage, varying concentrations of single-parent households were found to play a large role in economic mobility.
Rothstein’s research is also backed up by that of Marie Connolly, an economist from the University of Quebec in Montreal, who also spoke with The Atlantic:
“Education is just not a big part of the story. You can see a little role for school quality, but the structure of the labor market seems to be a much bigger driver.”
Rothstein emphasized that this is not a condemnation of college education, not at all. But it will provide some additional impetus for research into improving overall economic mobility in the United States. Plus, you don’t need a degree for every lucrative job out there—check out these cool jobs that don’t require a college degree.
[Source: The Atlantic]