COVID Impact on the College Wage Premium and the Rate of Return to Schooling in the Midwest

Abstract

This paper examines the impact of the COVID-19 recession on the college wage premium and the rate of return to schooling across twenty industries in twelve Midwestern states. Using data from the American Community Survey (2010–2023), the analysis finds that the pandemic had persistent negative effects on both measures. Compared to pre-COVID levels, the college wage premium and rate of return to schooling declined during the COVID-19 and post-COVID periods, with significant variation across industries. The results also indicate a mix of long-lasting, temporary, lagged, and recovery-driven reversals effects of the pandemic, depending on the industry.