Trends in opportunity costs of U.S. postsecondary education: A national HRD and human capital theory analysis

• Published in: New horizons in adult education & human resource development 2013, Vol.25 (2), p.62-82
• Main Authors: Cornacchione, Edgard, Daugherty, Jenny L.
• Format: Article
• Language: English
• Subjects: Academic Degrees; Causal Models; Census Figures; college premiums; Correlation; Costs; Economic Factors; Economic theory; education economics; Educational Attainment; Employment; Enrollment Trends; Gender; Gender Differences; High Achievement; Higher Education; Human Capital; Human Resources; Income; Labor Force Development; Learning Theories; Marginal income; Meta Analysis; Mincerian wage equation; Opportunity costs; Postsecondary Education; Prediction; Research Methodology; Retirement; Society; Statistical Analysis; System theory; Time to Degree; Trends; Workforce
• ISSN: 1939-4225; 1939-4225
• DOI: 10.1002/nha.20017

The purpose of this study was to explore opportunity costs of postsecondary education in the U.S. in the past three decades (1975‐2005), as a measure to support investment decisions at national levels and as experienced by individuals deciding on pursuing further education. Based on human capital theory and inspired by a set of studies aiming at investment decisions in education, official data from the U.S. Census (i.e., CPS), along with parameters for high education achievement, were fed into a forecasting model developed for this purpose. The model included parameters for degree completion rate, time for completion, expectation of working years, retirement age, inflation and interest rates for time value of money adjustments focusing on marginal annual income flows. Seven research hypotheses were tested under this ex post facto design employing elements of both descriptive and causal‐comparative research methods. The primary finding is that the postsecondary education opportunity costs for both males and females have been increasing in the analyzed period, along with a significant correlation with enrollment rates. When considering opportunity costs of bachelor's degrees across gender, the trend is somewhat steady. However, in the case of advanced degrees, there appears to be an increase in the absolute gap based on gender in the second half of the analyzed period. Beyond descriptive statistics, trends, and prediction models of opportunity costs for bachelor's or advanced degrees, findings on college premiums and gender differences are discussed in light of the National HRD framework.