College graduates tend to earn a substantial wage premium in the labor market. Below we plot the average annual wages of college graduates compared to those with only a high school diploma, adjusted for inflation and demographic differences between the two groups. (See our 2014 studyfor details on the methodology used for these calculations, as well as important caveats, which we revisit below.) In recent years, the average college graduate with just a bachelor's degree earned about $78,000, compared to $45,000 for the average worker with only a high school diploma. This means a typical college graduate earns a premium of well over $30,000, or nearly 75 percent. This "college wage premium" has fluctuated over time, as shown in the bars at the bottom of the chart. The college wage premium generally increased during the 1980s and 1990s, rising from less than $20,000 to around $30,000, before settling into a relatively narrow range of $30,000 to $35,000 after 2000.
Man, that income gap is huge!
Man, that income gap is huge!