According to a new study by Kansas State University, returning to college to earn a bachelor’s degree leads to both an immediate increase in annual income after graduation and an increase in annual income growth each year after graduation.
The research has been published in the ‘Economics of Education Review Journal’. Amanda Gaulke, assistant professor of economics in the College of Arts and Sciences, found that students who returned to college and finish a bachelor’s degree earn on average USD 4,294 more immediately after graduation and experienced extra income growth of USD 1,121 per year, on average.
“No matter how I looked at the data, those who returned and finished a bachelor’s degree see an economically meaningful increase in income after degree completion,” Gaulke said.
“The average age at graduation for this sample is 27, so they certainly have a lot of working years left to experience improved labour market outcomes,” she added.
While current economic literature mainly focuses on the traditional college student — those who graduate high school, go to college, earn a degree, and then start a career — Gaulke wanted to determine if returning to finish a bachelor’s degree resulted in improved economic outcomes compared to both those who never returned and those who returned to complete a bachelor’s degree but dropped out again.
“This information is important for people who are wondering if they should return to school,” Gaulke said.
“When thinking in terms of weighing costs and benefits, it is important for those people to know that there are real economic benefits of going back and completing a bachelor’s degree,” she added.
Gaulke’s study also showed students who re-enroll and earn a degree are significantly more likely to be employed, work more weeks and work more full-time weeks each quarter.
Additionally, those students who return but do not complete a degree also realised slight income gains.
Ultimately, businesses and the U.S. economy also benefit from having a trained workforce.
“To maximize economic output, we have to use resources efficiently. If employees are not as productive or skilled because they are unable to make well-informed decisions about re-enrolling and completing their bachelor’s degrees, this reduces worker productivity,” Gaulke said.
Gaulke said that another benefit of this study is that many institutions of higher education have concerns about enrollment numbers and are expanding their recruitment efforts beyond students coming straight from high school. Many private sector companies now offer services to help colleges and universities re-enroll students who left without completing their degrees.
The results of this study suggested that colleges and universities that develop or implement policies to help students re-enroll and finish a bachelor’s degree can potentially improve enrollment numbers and also help improve economic outcomes for these students as well.