There is no silver bullet to growing our economy, but research shows there is one economic strategy that comes the closest: college completion. It is ironic that at a time when we must focus on those economic strategies that have the greatest leverage, we are still debating the value of a post-secondary degree.

 

Yet it has become an increasingly debated question in the past decade, even more so during the economic downturn. Issues such as accountability, skyrocketing tuition costs, quality, and competitiveness cast doubt on the effectiveness of our current system. Today's college graduates are faced with a high unemployment rate and unprecedented student loan debt. While those in higher education wrestle with solutions for these problems, a new wave of short-sighted critics are encouraging students to seek shortcuts by bypassing a college degree altogether to become innovators and social entrepreneurs.

 

60 Minutes recently featured PayPal co-founder Peter Thiel, who suggested students drop out of high school or college to pursue careers based solely on their individual skills and ideas. Mr. Thiel cited college dropouts and tech executives Bill Gates, Steve Jobs, and Mark Zuckerberg as examples of success. This argument is akin to using Kobe Bryant, Dwight Howard, and LeBron James (all NBA players who bypassed a college career) as examples of success in the athletic world. (The percentage of kids who are actually drafted into the NBA directly from high school is less than half a percent -- 0.03 percent to be exact).  

 

In a move to increase the political and civic will to produce more college graduates and thereby help cities and regions capture real economic gains, CEOs for Cities calculated The Talent Dividend. We entered the conversation on education by focusing on the economic success of cities. A full 58 percent of any city's success, when measured by per capita income, can be explained by the percentage of the adult population with a college degree. Small performance improvements in educational attainment can yield big dividends for large metropolitan areas. In fact, if the 51 largest metropolitan areas each increased their college attainment rates by just one percentage point, it would be worth $124 billion in additional personal income for the nation.

 

The Talent Dividend illustrates that education matters more than ever in this increasingly competitive global economy. And the impact of a postsecondary degree reaches beyond the individual to our society as a whole. We have seen our nation's standings in education steadily decline in the past ten years, and for the first time ever in 2010, our world educational ranking fell to "average." The narrative in this country needs to be how we increase college completion, not shortcut around it. So we can get to the business of fixing the problems, let's review, for the record, the value of a postsecondary degree.

 

Multiple studies show that those with college degrees earn roughly $1 million more in a lifetime than those with only a high school degree.  A recent Georgetown University study found that people with bachelor's degrees make 84 percent more over a lifetime than high school graduates. According to a Brookings Institution study, a college degree returns 15.2 percent a year, more than double the return to stock market investments since the 1950s, and five times more than the return to bonds, gold, or government bonds. These studies suggest that, despite the rising cost of college, graduates will more than make up for the expense over the course of their careers. Graduates agree, as 86 percent of recent graduates reported to the Pew Research Institute that their college education was a good investment.

Employment

Beyond earning potential, Americans with a college degree face a substantially smaller risk of being, and staying, unemployed than those without diplomas. Between September 2008 and August 2010, 6.9 million American jobs were eliminated. In the last year and half, 3.1 million jobs have been created. The unemployment rate for individuals with a bachelor's degree or higher in April 2012 was 4 percent compared to 7.6 percent for individuals with some college, and 7.9 percent for high school degree holders.

As businesses slowly rebuild, they are seeking the most qualified, prepared workers they can find. Employers want and can be selective. According to a study released by the Committee for Economic Development, business leaders view higher education as critical to the nation's economic competitiveness and a postsecondary degree as critical to employment. They cited their interest in highly skilled graduates in the areas of science, technology, engineering, and math (STEM) as well as the importance of transferable skills one gains in college such as writing and interpersonal skills.

Higher Standard of Living

It should come as no surprise that if a college degree equals greater earnings and employment potential, it also leads to a higher standard of living.  A recently released College Board report suggests that having a college degree is not just about economic advantages. The report suggests that people with a postsecondary degree (and even those with some education) generally do better in life. They are more likely to be satisfied with their job, spend more time with their children, and live longer. The report also indicates that having a college degree changes the way individuals behave and the choices they make, making them more productive and higher paid members of the workforce. This in turn creates benefits for not only those who receive the degree, but those around them as well.

 

If we are to grow our economy in the coming years we must focus on developing a better-educated and more skilled and talented workforce. That means focusing on the economic strategy that returns the greatest economic dividend: Post-secondary success, with a special focus on 2-year and 4-year degree completion.