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The following article appeared in Left Business Observer #125, February 2010. Copyright 2010, Left Business Observer.

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I’m borrowing my way through college…

As everyone knows, the way to get ahead these days is by accumulating degrees. A rising education premium, as they say in economics, is the favorite official explanation for the increase in inequality over the last three decades. That’s far from a complete explanation, of course—it overlooks the decline of unions, for example—but there’s no doubt that the further you get in school, the more money you make. The problem is that it’s getting harder to pay the freight.

Graphed nearby is that legendary education premium. Note first how badly high-school dropouts have done. Back in the mid-1970s, they earned about 20% less than those who got a diploma; that deficiency has expanded to over 30%. [Since these are all expressed relative to high school grads, there is no line for them—it would be flat at 100%.] The advantage for those with more than high school has grown substantially—though that trend mostly topped out by the late 1990s. As of 2007, the average college graduate earned 83% more than a high school grad; those with advanced degrees, 159% more. By the way, the increase in the education premium has been particularly strong for women; although the male bachelor’s premium is larger than the female, the patriarch’s advantage has narrowed considerably over the last three decades.