Education and Earnings in Arkansas

Abstract

This paper presents the first recent systematic analysis of the returns to education in Arkansas using 2024 Current Population Survey data. Across methods (Mincerian earnings function and full-discounting methods, Heckman’s two-step procedure, Binder-Oaxaca, and quantile regression), education remains a profitable investment, with average returns of 7.5 percent per additional year of schooling and higher returns for women (8.6 percent) than for men (7.5 percent). University education yields even greater rewards—8.9 percent overall, 8.1 percent for men, and 10.8 percent for women—with full-discounting estimates placing private returns at 10.3 percent and “social” returns at 5.6 percent. Unlike national trends, Arkansas’s returns have declined since the pandemic, a shift that could dampen incentives for further study. However, the strong and consistent returns, especially for women, suggest that expanding access to and quality of higher education can be a powerful driver of earnings growth, workforce development, and long-term economic prosperity.