Data & Research January 13, 2009

Education Level Influences Plan Participation

The October 2008 Issue Brief from the Employee Benefit Research Institute (EBRI) indicates that workers with lower educational attainment have lower levels of retirement plan participation.

Reported by

Rebecca Moore

The Issue Brief examines the level of participation by workers in public- and private-sector employment-based pension or retirement plans, based on the U.S. Census Bureau’s March 2008 Current Population Survey (CPS), the most recent data available.

The analysis found that workers with the least education (no high school diploma) had significantly lower levels of retirement plan participation than those with at least a high school diploma. Specifically, 50.7% of those without a high school diploma and making $50,000 or more participated in a retirement plan, compared with 65% of those with the same earnings and only a high school diploma and 76.1% of those with a graduate or professional degree.

EBRI notes that educational attainment also has a strong correlation with earnings; however, when controlling for earnings, the most highly educated workers still had the highest levels of participation in a retirement plan.

For workers ages 21 to 64 with annual earnings from $15,000 to $29,999:

No high school diploma: 17.8% participate in a retirement plan.
High school diploma: 33.3% participate.
Some college: 37.9% participate.
Bachelor’s degree: 40.8% participate.
Graduate/professional degree: 39.5% participate.

Meanwhile, for workers 21 to 64 with annual earnings from $30,000 to $49,999:

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