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Comment by throwaway09223 | Hacker News Reader

This is probably true for everyone outside of certain low risk high return fields (like CS).

Regarding the gender angle, I'm reminded that the income gap is really between husbands and wives. Unmarried, childless women earn significantly more than unmarried, childless men on average. The primary issue revolves around which parent leaves a career to stay home with children. Career gaps are extremely costly.

If you factor in opportunity cost and lost wages for school years along with compound interest then most degrees will never generate a positive ROI. On average, degrees barely break even with their cost, but some degrees are far more lucrative than others -- meaning other degrees are far below breakeven ROI.

Taking a mid-career break makes it massively harder to overcome the costs related to obtaining a degree. This would be true for either men or women.

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> If you factor in opportunity cost and lost wages for school years along with compound interest then most degrees will never generate a positive ROI.

Do you have a source?

Because of a ton of confounding factors, how you are calculating opportunity cost, and a lack of what specific degrees you are eliminating from the calculation because they are high return fields it is not easy to confirm or negate your statement.

I've estimated this a few times with varying levels of effort. At a super high level:

Average estimated increase in earnings: 1.2m - https://cew.georgetown.edu/cew-reports/collegepayoff2021/

Average total cost of a 4 year degree: $140k - https://educationdata.org/average-cost-of-college

Average income of a 20 year old over 4 years: $144k (BLS, $36k/yr)

So you're looking at $300k lost from 18-22 for both expenses and wages. (loans generally increase this cost even more)

Assume 42 years average career duration before retirement (64 - 22)

Assume a 5% compounded rate of return.

The 300k will become $2.3 million, vs $1.2 million derived from median wage increases.

You can play around with these numbers, of course. Very rough. I didn't look at taxes, I didn't account for college-capable kids having above average earning capabilities, I didn't include increased costs from financing with loans, etc. I'm assuming full-time students who would otherwise be earning full-time income.

This isn't eliminating any degrees, this is an all-inclusive average. But, we do know that different degrees have radically different earnings profiles -- and from there you can pretty easily estimate how much better or worse off you'll be vs the average case illustrated above. Deviating from the average is zero-sum. Some degrees might beat the average several times over -- but conversely some degrees will underperform by similar ratios.

Two points:

1. You are assuming 0 income for the college track person, which is not the case for many, and was not for me. In my case, the "opportunity cost" was largely time spent on work/education (minus the difference in part v. full time and being on a career track), as opposed to leisure. But even without sacrificing leisure, many students work for 2-3 months a year during summer break.

2. You are assuming that a portion of that income will actually go to compounded return, this is not the case, most of that is eaten up by living costs at the lower wage.

They are not saving at high rates getting compounded returns (lazy first google result) https://www.cnbc.com/2017/09/14/how-much-money-the-average-m...

All I can say is that anecdotally, in my cohort, my peers/friends that got a degree are doing significantly better than those who do not. And that is why I mentioned confounding factors. It is likely many of those peers would not have done as well, but it is hard to work the numbers on that without going really deep.

But to figure out how much will go to compounded returns you need to look at only the savings rate for that cohort.

Well I said I was making those assumptions, yes. These are the extremely rough estimates. In terms of actual savings rates, you'd also need to account for borrowing -- which paints an even worse picture for college ROI.

"All I can say is that anecdotally, in my cohort, my peers/friends that got a degree are doing significantly better than those who do not."

This is a bit of a different argument, but the relevant cohort to compare are the people who qualified to attend college, but did not. College admissions act as a powerful filter. People who could attend college generally do as well as people who do attend, and have very different earning potentials compared to people who were not able to qualify for admission at all.

Oh, I agree, that's why I mentioned the confounding factors making it very complicated, and wondered if there was a source or research paper for it that tried to take all that into account beyond random data points.

But there are complications in every statement for example:

>People who could attend college generally do as well as people who do attend, and have very different earning potentials

In this case you have the hidden factor that a student could have and chose not to. Why did they make that choice?

It may have been the cost of college, or maybe even more likely it could have been an opportunity at a family business. So then you have to correct for that factor, because the people who chose to go, perhaps did not have that family business to join. Many of those people who did not go but could have, may have had a much clearer path to earning power than the random person.

I guess my point is that this is all very complicated without really in depth study, back of the napkin stuff only goes so far.

If you want a much more in-depth analysis covering many more factors (including the larger cohort of people who begin college but never finish, thereby taking on a great deal of the costs without most of the benefits) I cannot recommend Bryan Caplan's The Case Against Education, which comes to the controversial conclusion that higher education is selfishly advantageous for higher-achieving students but probably incurs greater costs than benefits for average-and-below students and society as a whole.

> Unmarried, childless women earn significantly more than unmarried, childless men on average.

Got a cite for this assertion?

https://www.npr.org/sections/money/2010/09/01/129581758/

  But there's one demographic where women outearn men: people who are single, childless, and between the ages of 22 and 30.

  Within that universe, U.S. women earn 8 percent more than men, on average, according to a new report from the research firm Reach Advisors.

  Women in this group out-earn men by an even larger margin in some metro areas -- 17 percent in New York, 11 percent in San Francisco, and a high of 21 percent in Atlanta, to name a few.

Thanks for the cite...unfortunate the referenced report by Reach Advisors wasn't linked, but the logic makes sense.

Pew had this which is a bit better sourced

https://www.pewresearch.org/fact-tank/2022/03/28/young-women...

Results shake out more equal because it just compared young women to young men, not adding the childless and unmarried restrictions.

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