A few months ago I asked readers here if college is still a smart investment. The answers were excellent and provided a good deal of clarity on what has become a pretty controversial topic in recent years as student debt has surged and the cost of a college degree has soared.
But a new study from David Autor shows that the value of a college degree is substantial. In fact, one of the key contributors to rising inequality is the skills gap. David cites the value of a college degree relative to a high school degree being as high as $590K:
I always like to say that the best investment you’ll ever make is in yourself. That’s becoming easier to do than it ever has with the proliferation of information via the internet, but validating your understanding isn’t always easy to do and a college degree is essentially one way to attain the approval of your peers. Of course, there’s a cost/benefit analysis that needs to be done with any significant investment, but if the new data is right then investing in a college education looks like a smart way to improve your odds of obtaining a decent paying job.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.