Education’s Value PropositionMARK ZANDI, CHIEF ECONOMIST

FROM MOODY’S ECONOMY.COM

'001-Feb1-Mar1-Apr1-May1-Jun1-Jul1-Aug1-Sep1-Oct1-Nov1-Dec'011-Feb1-Mar1-Apr1-May1-Jun1-Jul1-Aug1-Sep1-Oct1-Nov1-Dec'022-Feb2-Mar2-Apr2-May2-Jun2-Jul2-Aug2-Sep2-Oct2-Nov2-Dec'033-Feb3-Mar3-Apr3-May3-Jun3-Jul3-Aug3-Sep3-Oct3-Nov3-Dec'044-Feb4-Mar4-Apr4-May4-Jun4-Jul4-Aug4-Sep4-Oct4-Nov4-Dec'055-Feb5-Mar5-Apr5-May5-Jun5-Jul5-Aug5-Sep5-Oct5-Nov5-Dec-12'066-Feb-126-Mar-126-Apr6-May6-Jun6-Jul6-Aug6-Sep6-Oct6-Nov6-Dec'077-Feb7-Mar7-Apr7-May7-Jun7-Jul7-Aug7-Sep7-Oct7-Nov7-Dec'088-Feb8-Mar8-Apr8-May8-Jun8-Jul8-Aug8-Sep8-Oct8-Nov8-Dec'099-Feb9-Mar9-Apr9-May9-Jun9-Jul9-Aug9-Sep9-Oct9-Nov9-Dec'1010-Feb10-Mar10-Apr10-May10-Jun10-Jul10-Aug10-Sep10-Oct10-Nov10-Dec'1111-Feb11-Mar11-Apr11-May11-Jun11-Jul11-Aug11-Sep11-Oct11-Nov11-Dec'1212-Feb12-Mar34

36

38

40

42

44

46

48

50

At least college degree

Source: Bureau of Labor Statistics

College is Required To Get A Job…

No more than high school

Millions of jobs, 12 month moving average

Ad-vanced de-

gree

Bachelor's de-

gree

High

school

graduate

Less

than high school

200 400 600 800 1000 1200 1400

44%

Source: BLS, Moody’s Analytics

…and Earning a Good Living…Median weekly earnings, 2011q4 $

26%

67%

44

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 0940,000

45,000

50,000

55,000

60,000

65,000

70,000

75,000

Male Female

…But The Returns to Education Have Stalled…

Source: Department of Education

Constant 2009 $, bachelor’s degree, full-time, 25 and older

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11300

350

400

450

500

550

600

650

700

750

800

80

100

120

140

160

180

200

220Student Loans Outstand-ing, Bil$, (L)

College Tuition CPI, Index: 2000 = 100 (R )

Source: Equifax, BLS, Moody’s Analytics

… and Getting an Education is More Expensive

66

Italy

France

Germany

U.K.

Korea

OECD

Japan

U.S.

-20% 0% 20% 40% 60% 80% 100%

Sources: OECD, Moody’s Analytics

Unit labor costs in $, % chg, past decade

Reason to be Optimistic

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