Post-secondary education and consumption in Utah

Skylar Scott, Researcher
March 25, 2020

New research is well on its way. This research explores consumption patterns of Utah’s postsecondary graduates, and is in the final stages of peer-review. The goal of the study aims to understand the differences of income and consumption among individuals of varying educational accomplishments in Utah (2011-2018). To achieve this goal, three objectives are presented in the work: a summary of wages one- and five-years after postsecondary education, consumption patterns grouped by postsecondary achievement, and finally the difference in spending of these educational groups as compared to those with a high school diploma.

Graduates from Utah’s public universities, community college and technical colleges were separated by educational attainment, and matched with wage records one and five years after graduating. These records are presented in histograms for 2011 – 2013 cohorts. As education increases, the percentage of individuals crossing both living- and middle-class wage thresholds also increases. A higher percentage of individuals in all groups of educational attainment pass living- and middle-class wage thresholds five years after graduating. This trend demonstrates the importance of education and experience as it relates income-growth.

Higher incomes that are derived from higher education lead to higher amounts of consumption. Using the Consumer Expenditure Survey and adjusting for wages in Utah, estimates for consumption were taken. Two main takeaways were gleaned from this exercise. First, as education increases more money is available and is spent on consumption. Those with an associates, bachelors, and master’s degree spent more, in total dollars, on average than those with a high school diploma only. Second, high school graduates spend a higher percentage of their income than any other group of educational attainment. As a result, those with a master’s degree or higher can save 10 times as much as their income as compared to their counterparts with a high school diploma only.

Consumption figures from each educational group were then subtracted from those with a high school diploma to understand where additional spend occurs as more education is obtained. Categories where the most spending occurred is in housing, healthcare, transportation and taxes. Additional consumption also takes place in luxury goods like entertainment, recreation, and food away from home as more income is obtained.

As the peer-review process is completed, I am excited to share more information in regard to the additional consumption of those with post-secondary education in Utah. We hope that as things continue to change in Utah, the UDRC will continue be an up-to-date source for insight and information for the state. .