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By Robert Johnson, CFA | 08-04-2014 08:00 AM

Unemployment by Education Level: A Drastic Gap

The unemployment rate is about three times higher for those with no high school diploma versus college graduates, says Morningstar’s Bob Johnson.

Bob Johnson: Today's chart compares educational attainment--that is the years of school that you've attended--to the unemployment rate. And the results are drastic. If you take a look at the chart, the uppermost line--that is the people with the highest rate of unemployment--[these are] people without even a high school degree. And, there, the unemployment rate is nearly 10%.

If you look at the bottom line--that's people who have a bachelor's degree or better--those people have a drastically better unemployment rate. It's down about 3.5% or about a third of what it is if you don't have a high school degree.

By the way, if you look at the chart, you can see that there is a relationship [between the education level and unemployment], as you go step-by-step. The more, the better. If you have a high school degree, you're better off; if you've started some college, you're doing better; and if you have a college degree, you're doing the best of all. So, that's the proof in the pudding: The more education you have, the better off you are. 

Now, on the other hand, one thing that's surprising to many people is that the percentage of the population that has a college degree has been relatively stable in the 30% range. Right now, it's at 38%. It hasn't gone up drastically. And there is a huge part of the population that could probably use yet more college education. Putting these two together, college absolutely pays. And we need to get more people into college because it's not as big of a percentage as what it really could be.

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