Question

What generalization about educational attainment and annual earnings can be made according to the graph? A) Investment in education can lead to higher annual earnings. B) Annual earnings remain constant for all educational degrees. C) A worker with some college earns more annually than a worker with an Associate's degree. Eliminate D) Although a worker with a Professional degree earns more initially, the annual earnings decrease over time.

Answer 1

The correct answer is option A, Investment in education can lead to higher annual earnings.

According to annual statistics from the Federal Reserve provided by the US Census Bureau, the direct link between earnings and education is both, strong and incredibly well documented. In the year 2008, workers with a bachelor's degree in average earned 65 percent more than those with only a high school diploma and as much as 130 percent more than workers without a high school diploma.

According to the Department of Labor, the income difference between people with a college degree and those with only a high school diploma is known as the 'college premium', which has nearly doubled since the 1970's according to  well-known labor economist Kevin Murphy.  

In the year 2008, statistics showed that college graduates had significantly lower rates of unemployment (2.8 %)  in relationship to high school graduates (5.7 %) and individuals who did not finish high school (9.0 %)