Study explores how higher education pays off for older americans at different ages

Lauren Williams's picture
Thursday, January 9, 2014

New research from the Institute for Women’s Policy Research (IWPR) finds that higher education pays off for women and men for all ages 50 and older, including for the oldest group studied, those 75 and older. Those with higher levels of education—meaning those with at least some education beyond high school—work more at older ages and earn more per hour at older ages, relative to those with less education. Women, however, earn less at every age and education level than men, and often earn about the same as men who are at the educational level below them. The higher hourly wages that workers with higher education earn (relative to those with no education beyond high school) decline with age for both women and men.

Societal trends, such as increased educational attainment and improvements in health; policy changes, such as increases in the retirement age for full Social Security benefits; and the declining value of assets as a share of older Americans’ incomes have changed the work behaviors and economic security of older Americans.

This report, How Education Pays Off for Older Americans, by Heidi Hartmann, Ph.D., and Jeff Hayes, Ph.D., examines differences in work and wages among women and men aged 50 and older at different levels of educational attainment, and includes information about the most common occupations for men and women by age. The authors analyzed the American Community Survey, a household survey conducted monthly by the Census Bureau, for the years 2005-2009. More than five million Americans aged 65 and older are employed and constitute four percent of the workforce.

Findings from the study include:

  • Women in the two highest education groups earn about the same as men one educational group lower. Women with a Bachelor’s degree earn about what men with some college or an Associate’s degree earn, and women with a postgraduate education—Master’s, PhD, or professional degree—earn wages similar to men with a Bachelor’s degree. At ages 65 and older, women with a Bachelor’s degree or more earn $3-$9 more per hour than women without postsecondary education, and men with postsecondary education earn $4-$12 more per hour (depending on age and higher education level).
  • Women with advanced degrees lose more earnings with age than men do.
  • Estimated earnings of older Americans age 65 until their eventual retirement are three to almost five times higher for those with advanced degrees compared to those with only high school or less (and two to almost three times higher for those with Bachelor’s degrees).
  • The largest occupations for older women and men reveal considerable gender differences. Not only is there little overlap in the largest occupations for men and women aged 50 and older—only retail salespersons appear in the women’s and men’s lists of their ten largest occupations—but the occupations in which older men work pay more. For those aged 75 and older, several very high wage occupations are among the most common for men: physicians and surgeons (at $64.54 per hour), lawyers and judges (at $59.13 per hour), and chief executives and legislators (at $48.00 per hour). For older women of the same age group, the highest paying occupation in the top ten list is secretary and receptionist at $15.37 per hour.

The report was published on December 31, 2013. The authors are available to respond to questions about the study. For more information, visit http://www.iwpr.org/