Human capital investment .ppt @ bec doms

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