New Federal Reserve report: Improvements in overall financial well-being in 2016 driven by the better educated

New survey research from the Federal Reserve Board, Report on the Economic Well-Being of U.S. Households in 2016, finds that 

Overall, the modest improvements in financial well- being that were observed in recent years continued into 2016. However, those with more education appear to have driven most of the observed gains in well-being relative to the previous year.

Seattle Times business columnist Jon Talton reports on the study, emphasizing the findings on financial well-being.

The favorable results were heavily tilted to those with more education.

For example, 17 percent with a bachelor’s degree or higher said they were struggling financially. But 40 percent with a high-school diploma or less were in this category. Overall, approximately 73 million adults were struggling financially.

Sliced another way, 80 percent of people with bachelor’s degrees or higher reported relatively high financial security, 20 percentage points higher than those who had only completed high school or failed to do so.

The benefits of education, of which we’ve written (for example, here and here), are recognized by most recipients. Those with the most education value it the most. 

In order to monitor the perceived value of higher education, the survey asks respondents who com- pleted at least some college whether they believe that the lifetime financial benefits of their postsecondary education outweigh the lifetime financial costs. Overall, 53 percent of adults with at least some college education feel that the benefits of their education exceed the costs and an additional 26 percent feel that the costs and benefits are about the same…

While individuals generally view their education as worthwhile, responses to this question vary based on several characteristics of the education. Among non-completers, who attended college but failed to complete at least an associate degree, 36 percent feel that the education was worth the cost, whereas 26 percent feel that the costs outweigh the benefits. For those who completed additional education, the likelihood of viewing the degree as beneficial is much greater. Among these degree completers, 64 percent feel that the benefits of their education outweigh the costs, compared to just 16 percent who feel the costs outweigh the benefits.

It’s likely that the rewards for completion of postsecondary education will continue. Previously, we’ve reported on research by the Boston Consulting Group and Washington Roundtable projecting that the majority of jobs opening up in our state in the next five years will be filled by workers with postsecondary credentials