Reconsidering the Relationship Between Higher Education, Earnings, and Productivity - Paper - Equity-Driven Analysis

Oct 15, 2026

Uploaded by Angel

Reconsidering the Relationship Between Higher Education, Earnings, and Productivity examines how education relates to individual productivity and earnings, challenging the assumption that schooling effects are absolute. It highlights measurement concerns and argues that labor market discrimination undermines human capital theory. Using an equity lens, it frames how institutions and programs create postsecondary value, and how conceptual definitions and measurement frameworks can support fairer outcomes for students and society.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages10

Reading Time25 min

AccessFree to download

Introduction

The Relationship Between Education and Individual Productivity is Far from Absolute

CEO “Super-Salaries” Raise Questions about Measuring Productivity Separately from Earnings

Labor Market Discrimination Directly Contradicts Human Capital Theory

Conclusion

References

RECONSIDERING THE RELATIONSHIP BETWEEN HIGHER EDUCATION , EARNINGS , AND PRODUCTIVITY William A. Darity, Jr. and Miles Underwood Duke University TABLE OF CONTENTS Introduction ................................................................ 2 The Relationship Between Education and Individual Productivity is Far from Absolute .... 3 CEO “Super-Salaries” Raise Questions about Measuring Productivity Separately from Earnings ..................................................... 4 Labor Market Discrimination Directly Contradicts Human Capital Theory ............... 5 Conclusion ................................................................. 8 References ................................................................. 9 This paper is one in a foundational research series for the Postsecondary Value Commission authored in summer 2019 by scholars with diverse backgrounds and expertise. The research presented in these papers applies an equity lens to the philosophical, measurement, and policy considerations and assumptions underlying key components of postsecondary value to students and society, including investment, economic and non-economic returns, mobility, and racial and socioeconomic justice. The Postsecondary Value Commission consulted this foundational research as it developed a conceptual definition of postsecondary value, a framework for measuring how institutions and programs create value and ensure equitable outcomes, and an action agenda with recommendations for applying the definition and framework to change policies and practices. Through this breadth of scholarship, the commission was better able to define the value of postsecondary education and the role institutions can play in creating a more equitable and fair United States. Following the May 2021 release of the commission’s findings, these foundational papers were prepared for publication. The views and opinions expressed in these papers do not necessarily reflect the positions of individual members of the Postsecondary Value Commission or the organizations they represent. The Postsecondary Value Commission along with the Bill & Melinda Gates Foundation and Institute for Higher Education Policy are deeply grateful to the authors of this series. The authors’ extensive expertise and thoughtful engagement in this work provided the foundation for the commission to develop an informed, innovative, and equity-driven framework. They also thank Deborah Seymour for editing the written products and the team at GMMB for their creative design and layout. Suggested citation: Darity, W.A. , Jr. & Underwood, M. (2021) . Reconsidering the Relationship Between Higher Education, Earnings, and Productivity. Postsecondary Value Commission. INTRODUCTION 21st century research, to date, indicates that the private and social returns from higher education are substantial. For example, the Georgetown University Center on Education and the Workforce (GUCEW) estimates that those with higher educational attainment will earn more over the course of their lives than those with lower attainment. Relative to the median worker with only a high school degree, associate’s degree holders earn 1.3 times more, workers with a bachelor’s degree earn 1.7 times more, and workers with a graduate degree earn more than two times more (Carnevale, Rose, Cheah 2011) . Likewise, Hill, Hoffman, and Rex (2005) estimated individuals’ inflation-adjusted return on investment in higher education at about 12 percent at the turn of the century. They also emphasized that the monetary value of a college degree increased sharply between the 1980s and the early 2000s (Hill, Hoffman, and Rex, 2005) . This association between schooling and earnings leads to a vocational imperative for education—the view that the purpose of education, at all levels, is preparing people for the workforce and the more education they attain, the greater their earnings. In the same way, the positive associatio

FAQs

What central claim does the paper make about the education–earnings link?

The paper argues the relationship between higher education and higher incomes is not absolute, because earnings and productivity are influenced by factors beyond schooling alone.

Why does the paper question measuring productivity separately from earnings?

It raises concerns using CEO “super-salaries” as an example, suggesting common approaches can conflate how productivity is measured with how earnings are observed.

How does labor market discrimination relate to human capital theory in this paper?

The paper states that labor market discrimination directly contradicts human capital theory, indicating that observed outcomes may reflect inequities rather than education-driven value-added.

Oct 15, 2026

Uploaded by Angel