Incomes Flat for Young College Grads

Last week, the Census Bureau updated its personal income tables for 2013. I covered them extensively last year, and I’m disinclined to rehash that entire post since there’s little difference between 2013 and 2012 (or any two consecutive years for that matter). Just about all of what I said there still stands. It also helps that the NY Fed’s research on 25th percentile college graduates’ earnings spares me a chart for this year at least.

Nevertheless, a quick summary: The median earnings for college graduates aged 25 to 34 were just about identical to 2012. Census tracks earnings for professional school graduates, but those tend to be more volatile given the smaller sample. It’s certainly difficult to carve out law school graduates’ earnings; you’re better off looking at the law school uninfographic for that. High school graduates’ incomes fell by about four percent, which is bad.

Median Earnings by Education (25 - 34)

Labor force non-participation among 25-to-34-year-olds rose a smidge in 2013. Last year, one in four high school graduates did not work, nor did more than one college graduate in eight. You can take what you will for professional school graduates.

Percent of 25-to-34-Year-Olds With Zero Earnings by Education

In all, I’d say there’s slight evidence that 2013 was a harder year for high schoolers than 2012, but college grads stayed in place.

One of these days I should separate these numbers by sex. It might be illuminating.

That’s all for this week, I think.


  1. It’s not that simple. IN Japan, becase of racial solidarity, the goverment would feel guilty letting all of those firms fail, which is necessary to create conditions for new investment, capital accumulation opportunities. In the U.S., because of multiculturalism, no cares if their neighbor is unemployed, much less the government. The U.S. fed only cares about keeping asset prices inflated.

  2. Breaking it down by sex shows that young women considerably out earn young men. It’s 12% in NYC and 17% in SF. Someone beat you to it.

  3. How would you distinguish credential inflation from “human capital” improvement when looking at wage data? They would both seem to have a similar effect – causing those with greater credentials to make more on average. However with credential inflation you wouldn’t actually be increasing total wages, just shifting wages more towards those with greater credentials.

    1. There are ways of doing it, but they’re not very robust. One that I know of is to use the same formula (called “the human capital earnings function” or the “Mincer equation,” named after Jacob Mincer) that compares the natural log of income (and other stuff) to the number of years of schooling a sample of people have but use the formula on national income. Put differently, you’re taking the natural log of national income (and other stuff) and the average years of education. Or something like that. Then you can compare the results between multiple countries. If the national income version gives smaller incomes than the sample, then it’s possible that a lot of the higher incomes are due to signaling rather than human capital.

      In other words, if you measure the effect of increased education on national income and you don’t find much improvement, it means that at an individual level, the increases you’re seeing in people’s incomes is due to the education rat-race.

      George Mason economist Bryan Caplan did a write-up of this. You can find it here.

  4. Getting yourself educated is no panacea. It’s like when literacy became widespread. Before then, if you could read and write, you had a marketable skill. Afterwards, you had to know how to read and write but that did not distinguish you from millions of others. The skill kept you from the bottom but it no longer helped you to the top.

    So get yourself educated to enjoy knowledge. But for income, geonomize society.

    Get rid of taxes on labor. Get rid of corporate welfare. Charge dues for holding land so owners keep it at highest use, which in cities opens up tons of opportunities for investors and job-seekers. And from the recovered ground rents, pay citizens a dividend so they need not compete for employment and wages can rise their naturally high level. More at

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