Education & Wages

Christopher Rath



I'm doing an Executive MBA at the moment, and my macroeconomics textbook (Macroeconomics, by Blanchard & Johnson) pointed me to some interesting numbers published by the USA's Congressional Budget Office (BDO): US hourly wages by education level, from 1973 to 2007.  The textbook credits the Economic Policy Institute for the graph (although I was unable to locate the specific dataset on their website).  In any case, here's the data and the graph.

Data & Graph

The graph shows how wages have evolved between 1973 and 2007. The lines show how the wages of someone with a particular education level have had their wages rise or fall since 1973. The starting hourly wages for each category are as follows:


Some High School

High School

Some University

University Degree

Advanced Degree













The lines then plot how that wages changed. I’ve also shown the final wages data point in the table (above) to help illustrate the graph’s message.

What is very interesting is how starting in 1982 wages began to differentiate by income level. The textbook’s author posits that the differentiation is driven by the need for employees to be more and more flexible as jobs have become more technological.

The commentary on the EPI website focuses solely upon the fact that since approximately 2000 wages have not risen in any education category.  Rather than take this message away from the graph ("Evolution of Relative Wages, by Education Level, 1973–2007"); my takeaway is that the more education you get the better off you will be (compared to the rest of society). The EPI's interpretation isn't false, it's just not the only message contained in the data.

The data used to create the above graph was taken from The State of Working America 2008-10, table 3.15.

©Copyright 2013, Christopher & Jean Rath
Telephone: 613-824-4584
Address: 1371 Major Rd., Ottawa, ON, Canada K1E 1H3
Last updated: 2013/09/06 @ 13:57:04 ( )