Is College a Worthwhile Investment?

Lisa Barrow, Ofer Malamud

Research output: Contribution to journalReview articlepeer-review

36 Scopus citations


This article surveys the existing evidence on the return to a college education and offers new calculations based on recent data. We focus on an individual's decision and outline the standard conceptual framework used by economists to analyze investments in education. We then compare alternative estimates of the value of a college education in the literature and reconcile them with our own preferred estimates. We also conduct a selective review of the literature seeking to estimate the causal effects of college on pecuniary and nonpecuniary outcomes. Finally, we provide additional calculations showing the heterogeneity in returns to college across certain institutional and demographic characteristics, review the related academic literature, and discuss the risk associated with a college investment. We conclude that college is certainly a worthwhile investment on average and likely worthwhile for many subgroups, although not necessarily for everyone.

Original languageEnglish (US)
Pages (from-to)519-555
Number of pages37
JournalAnnual Review of Economics
Issue number1
StatePublished - Aug 2 2015


  • human capital
  • postsecondary schooling
  • rate of return

ASJC Scopus subject areas

  • Economics and Econometrics


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