An empirical investigation of the financial value of a college degree

Bento Lobo and Lisa A. Burke-Smalley

Education Economics, 2018, vol. 26, issue 1, 78-92

Abstract: We generate selection-adjusted NPV and IRR estimates for a bachelor’s degree in the U.S. which account for time-to-graduation, debt financing and tuition levels. We find that a college degree is generally worthwhile, but the private value of the investment is a declining function of time-to-graduation. Selection-adjustments show that for students at the lower end of the ability distribution and in some areas of study, a college degree may never be a good financial proposition; as such, we provide breakeven thresholds for tuition at which college remains viable. Debt financing generates higher returns but greater risk compared to self-financing.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/09645292.2017.1332167 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:edecon:v:26:y:2018:i:1:p:78-92

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CEDE20

DOI: 10.1080/09645292.2017.1332167

Access Statistics for this article

Education Economics is currently edited by Caren Wareing and Steve Bradley

More articles in Education Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().