The document discusses human capital investment through education and career choices. It provides examples of how getting an education, learning skills through apprenticeships or having children are all ways to invest in human capital. Brighter individuals tend to get more education because they see the marginal benefits of education exceeding the costs. The document also examines how earnings vary based on factors like level of education, occupation, gender and race.

1. Human Capital Investment - The process of increasing the household’s holdings of human wealth either by engaging in formal or informal training or by adding household members. 1

8. Average wages, all workers over 25 – 2007 8 Data: Current Population Survey (CPS) 2008 http://pubdb3.census.gov/macro/032008/perinc/new03_001.htm

9. 9 Source: www.collegeboard.com

10. 10 Developing a Career Action Plan

11. 11

14. Social Influences 14 City 1 Index number x salary City 2 Index number = $ buying power Cityrating.com/costofliving.asp Bestplaces.net/col (separates into categories) If Omaha, Nebraska has an index number of 93.3 and Chicago has an index number of 123, a person moving from Omaha making $30,000 annually would need to make $39,550 in Chicago to be making the same real salary: 123 x $30,000 93.3 = $39,550

19. 19 Cumulative Earning Potential Based on Degree Earned Education Avg. Income No high school graduation $1,573,851 High school graduate $2,342,793 Bachelor’s degree $4,281,887 Advanced degree $6,207,032

21. Tax-Equivalent Employee Benefits 21 Value of the benefit this formula calculates the tax-equivalent value of a (1-Tax Rate) non-taxable benefit. Example: Receiving a $350 tax free benefit is worth $486 of taxable benefits if you are in the 28 percent tax bracket, calculated as follows: $350 = $350 1-.28 .72 =$486 A variation of this formula would give the after-tax value of a taxable benefit: Taxable value of the benefit x (1-Tax Rate) Using the above example, $486 (1-.28) = $486 (.72) = $350

22. Changing Careers 22

23. 23

25. 25 Unemployment Rates and Earnings Differences by Education Source: Bureau of Labor Statistics, Current Population Survey. http://www.bls.gov/emp/ep_chart_001.htm Data are 2010 annual averages for persons age 25 and over. Earnings are for full-time wage and salary workers. Unemployment Rate Educational Level Median Weekly Earnings 1.9% Doctoral Degree $1,550 2.4% Professional Degree $1,610 4.0% Master’s degree $1,272 5.4% Bachelor’s degree $1,038 7.0% Associate degree $767 9.2% Some college, no degree $712 10.3% High-school graduate $626 14.9% Less than a high school diploma $444

26. 26 Unemployment Rates and Earnings Differences by Education Source: Bureau of Labor Statistics, Current Population Survey. http://www.bls.gov/emp/ep_chart_001.htm Data are 2008 annual averages for persons age 25 and over. Earnings are for full-time wage and salary workers. Unemployment Rate Educational Level Median Weekly Earnings 2.0% Doctoral Degree $1,561 1.7% Professional Degree $1,531 2.4% Master’s degree $1,233 2.8% Bachelor’s degree $1,012 3.7% Associate degree $757 5.1% Some college, no degree $699 5.7% High-school graduate $618 9.0% Less than a high school diploma $453

27. 27 Unemployment Rates and Earnings Differences by Education Source: Bureau of Labor Statistics, Current Population Survey. http://www.bls.gov/emp/ep_chart_001.htm Data are 2010 compared to 2008 annual averages for persons age 25 and over. Earnings are for full-time wage and salary workers. Unemployment Rate Educational Level Median Weekly Earnings 1.9% ( .1%) Doctoral Degree $1,550 ( $11) 2.4% ( .7%) Professional Degree $1,610 ( $79) 4.0% ( 1.6%) Master’s degree $1,272 ( $39) 5.4% ( 2.6%) Bachelor’s degree $1,038 ( $26) 7.0% ( 3.3%) Associate degree $767 ( $10) 9.2% ( 3.1%) Some college, no degree $712 ( $13) 10.3% ( 4.6%) High-school graduate $626 ( $8) 14.9% ( 5.9%) Less than a high school diploma $444 ( $9)

28. What are the costs? (2011 #s) 28 University of Utah Tuition & fees for 2 semesters $7,768 Books $1,800 Foregone Earnings (2010 HS degree – men, $626 x 52) $32,552 Total Costs $42,120