Does educational attainment determine financial success? A statistical assessment.

Formal education has been one of the determining factors of financial success—at least

this is what is taught to us by the media and our parents. This holds true even in the Filipino

context. We oftentimes hear parents tell their children to study for it is the only thing they can

give. Though this is not as explicit as it may sound, they are implying that through education,

financial success and stability is achieved. It has been a social norm that education dictates how

wealthy and successful you can be in life. Education has been an investment and is believed to

boost our productivity. People invest in education for the same reason they invest in financial

assets, including to generate income.

Students enter the university with thoughts of finishing a degree that will help them land

in their dream job, earn money and be rich. In our recent context, parents and educators

condition the learners that education is the key to success, and without it they would hardly

achieve anything in life. The degree of education or educational attainment also has varying

expected effects when it comes to predicting how much you will earn—a specialization in an

area is also one factor to consider on the range of profit one person can be offered. Those who

had pursued post-graduate degrees are expected to earn more than those who finished a

bachelor’s degree—in summary, the more specialized you become, the higher earnings and

salary grades are offered to you.

The issue of the correlation between formal education and financial stability is relatively

strong. According to a 2007 survey, only 23 percent of the Filipino population was able to get a

degree in college. On a more recent survey conducted in 2020, it showed that 26.4 percent of the

total unemployment rate in the Philippines is comprised by non-degree holders, while 23.9
percent of the unemployed are degree holders. These statistics has to be laid out because it is

important to note that one indicator that is also worthy to be considered is employment; do

people with formal education gets lesser chance of being unemployed than those without formal

education or those who did not earn a degree? The research suggests that workers with more

education have lower mean unemployment rate than those with less education. This implies

higher chance of being financially stable for those who received formal education.

To look on the other side, it is admittedly evident that there are success stories where

college dropouts, and/or people who were not able to undergo formal schooling were able to

become successful through business and earned a lot of money, and while there are also

researches that back up that the value of a college diploma is depreciating over time, the general

trend remains in strong support for education as determinant of success. Though it is mentioned

that many people view education as an investment, there also those who believe that education is

such a waste of time and money, that it is more practical to hustle your way to success without

undergoing through years of intensive formal schooling.

With these positions at hand, it is worthy to study and statistically assess if there is a

correlation between educational attainment and financial success, given that our country is

experiencing an increase in unemployment and increase in drop out rates as well. Taking into

consideration all the relevant information to about the level of relationship between educational

attainment and financial success, this study will be helpful in strengthening the determining

factor of success, be it being formally trained in school or the other way around. This will also

seek that, if not formal schooling is the key to financial success, what other factors can be

considered as precursors to financial stability and overall life success