skip to main content skip to footer

Skills and the Earnings of College Graduates The Impact of Human Capital in the American Labor Market Series PIAAC

Fogg, Neeta P.; Harrington, Paul E.; Khatiwada, Ishwar
Publication Year:
Report of the ETS Center for Research on Human Capital and Education
Document Type:
Page Count:
Subject/Key Words:
Human Capital, College Graduates, Education Work Relationship, Occupations, Earnings, Employment, Labor Market, Educational Attainment, Demographic Characteristics, College Majors, Work Experience, Cognitive Skills, Literacy Skills, Numeracy Skills, School-to-Work Transition, Programme for International Assessment of Adult Competencies (PIAAC), Higher Education


In this paper, which is the second in the "Impact of Human Capital in the American Labor Market" series, the authors reveal that there are large groups of college graduates who lose out on the seemingly automatic earnings premium from their degree, and that their failure is related to a lack of skills. One of every five bachelor's degree holders among employed college graduates ages 21 to 65 lacks some important skills in literacy. For numeracy, the number is one in three. Furthermore, the authors determined that access to college labor market, or CLM, occupations is critical. Working in an occupation that utilizes the skills, knowledge, and abilities that are typically developed with a college education reaps large earnings premiums. But those who wind up mal-employed—working in jobs that do not require those types of skills—get no premium at all. In other words, regardless of your college degree, if you end up working in a noncollege level occupation, you will wind up earning no more than the average high school graduate. This report amplifies a crucial message emanating from a wider series of reports by the ETS Center for Research on Human Capital and Education: the importance of human capital and the cost to a large number of individuals—and to society itself—when levels of it are lacking. What is human capital? It is the stock of productive capabilities of individuals and is the currency of today's society. Investments in human capital ideally pay off through higher earnings, improved health, increases in civic engagement, and more.

Read More