A few days ago I posted an article called Going to School Pays Off. I talked about what people at certain education levels can expect to earn throughout their lives. It really made me wonder what the opportunity cost was of going to school for 12 years.

Opportunity cost is is the cost of something in terms of an opportunity forgone (and the benefits that could be received from that opportunity), or the most valuable forgone alternative, i.e. the second best alternative. For example, if a city decides to build a hospital on vacant land that it owns, the opportunity cost is some other thing that might have been done with the land and construction funds instead. In building the hospital, the city has forgone the opportunity to build a sporting center on that land, or a parking lot, or the ability to sell the land to reduce the city’s debt, and so on. – Wikipedia

Around here a high school graduate with no degree can earn around $7.00 per hour without trying too hard. So let’s create a basic scenario. We have 2 guys. One graduates high school at the top of his class, goes on to a prestigious college, then goes on to medical school, graduates and makes it to his residency and his fellowship and is a full fledged medical doctor after 12 years. Guy number 2 graduates high school and goes on to get a job at your favorite fast food chain making $7.00 per hour. [Read more →]