US school leavers see their financial circumstances fall

College graduates report greater financial stability

American adults without a college education saw their overall financial circumstances decline last year for the first time in three years.

The finding was one of the takeaways from a US central bank survey of more than 6,640 adults published on Friday.

In total, the number of respondents with no more than a high-school diploma who said they were "living comfortably" or "doing okay" fell to 60% from 61%.

Overall, the annual survey showed US economic health improving.

Some 70% of respondents said they were either "living comfortably" or "doing okay," up from 69% the year before, and 62% in 2013 when the Federal Reserve started the survey.

But there were continuing signs of instability, with over a third of US households (35%) saying they could not cover their monthly bills or an unexpected $400 (£307) expense, according to the survey.

Education matters

The survey also suggested that disparities between households with different education levels was growing.

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"A clear pattern over the past two years across these measures is that the improvements have been most pronounced among those with greater levels of education," researchers wrote in the report.

Highly correlated

Nearly 100 million Americans have no education beyond high school, according to US government estimates. (The estimate excludes members of the military and people in institutional facilities such as prison.)

That fact is tied to wide differences, the survey found.

The wage gap between rich and poor is growing

About 46% of adults with at least a college degree reported family incomes of $100,000 or more, compared to just 9% of respondents with a high school degree or less.

Adults with at least a college degree were more likely to report earning money from online activities - such as renting out properties using a website - and more likely to have a steady stream of income from month-to-month.

They were also more likely to say they received a raise in the last year, and more likely to say it exceeded the growth in their expenses.

"The thing is that earnings are so highly correlated with education and employment," said Sandy Baum, a senior fellow at the Urban Institute, a Washington think tank. "It's hard to imagine how a sense of financial wellbeing would not be correlated with education."

Growing gap

Jobs in sectors that once supplied well-paid work for school leavers, such as manufacturing, have fallen. At the same time, the overall labour market has become more unstable as employers cut back on benefits and pay rises.

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The share of Americans in the workforce is also shrinking - particularly among those with lower levels of education, said Valerie Wilson, an economist at the Economic Policy Institute.

"The workers we would expect to have the strongest labour attachments have actually been becoming less attached," she said.

Among survey respondents who did not attend college, nearly 40% said it was too expensive or that they needed to earn money. Their status was also closely tied to whether their parents had attended college.

But Ms Baum said simply getting everyone to go to college is not the solution.

"There could be more work done to equalise things at the level of higher education but the problem is never going to be solved just at the college level," she said.