Over the past 25 years, the earnings gap among workers with varying levels of educational attainment has widened significantly. In 1975, full-time, year-round workers with a bachelor’s degree earned 1.5 times more annually than those with only a high school diploma. By 1999, this disparity had increased to 1.8 times. Similarly, workers with advanced degrees, who earned 1.8 times the earnings of high school graduates in 1975, averaged 2.6 times the earnings of high school graduates by 1999. Conversely, the earnings of the least educated workers declined relative to high school graduates. In 1975, workers without a high school diploma earned 0.9 times the earnings of high school graduates; by 1999, this figure had dropped to 0.7 times.
This shift in relative earnings can be attributed to changes in both labor supply and demand for skilled workers. During the 1970s, the earnings premiums for college graduates decreased due to their increased numbers, which narrowed the earnings gap among different educational levels. However, recent technological advancements have increasingly favored skilled and educated workers, leading to higher earnings for those with higher education. At the same time, a decline in labor unions and a decrease in the minimum wage in constant dollars have contributed to lower wages for less educated workers.
Adults aged 25 to 64 who were employed at any point during the study period earned an average of $34,700 per year. Earnings varied significantly by education level: high school dropouts earned an average of $18,900, high school graduates earned $25,900, college graduates earned $45,400, and workers with professional degrees (such as M.D., J.D., D.D.S., or D.V.M.) earned $99,300 on average. As illustrated in Figure 1, except for those with professional degrees who have the highest average earnings, each successive level of education is associated with increased earnings.
Adults aged 25 to 64 who were employed at any point during the study period earned an average of $34,700 per year. Earnings varied significantly by education level: high school dropouts earned an average of $18,900, high school graduates earned $25,900, college graduates earned $45,400, and individuals with professional degrees (M.D., J.D., D.D.S., or D.V.M.) earned $99,300. As illustrated in Figure 1, with the exception of those with professional degrees who have the highest average earnings, higher levels of education are consistently linked to increased earnings.
