PayScale just released a College Salary Report: Best Colleges & Degrees. With my able associate Erica Sanders, I had a great time digging through our extensive data to understand whether graduates of different schools have different long-term salaries.
What makes our data so unique is that we have the jobs people are doing now – 5, 10, 20 or more years after they attended their undergraduate institution – and what these graduates are being paid now.
There are other surveys that track recent graduate salaries, and we can do that too. (See my post on Starting Salaries for College Grads.) We also have previously mined our college data for March Madness (Alumni Salaries vs. NCAA Championships), to mixed success in predicting the outcome of the Men’s basketball tournament. 🙂
In this post, I’ll look at our College Salary Report – Best Colleges and Degrees methodology, what the different salaries mean, and apologize to Temple University, Weber State University, and Claremont McKenna College for not including them in our report 🙂
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Graduates In and Out
Our College Salary Report is based on median (average) annual salaries:
- for bachelor’s degree graduates, who have not earned a higher degree
- for 320 universities and colleges in the United States
- for both starting career (median age: 26) and “mid-career” (median age: 42) graduates
- for graduates who are currently employed full-time in the US as a salaried or hourly wage worker.
Salaries include all cash compensation (bonuses, commission, etc.), but does not include equity (stock) compensation or other non-cash compensation. See the College Salary Report Methodology Overview page for all the details.
We did not calculate the average salaries of all graduates of a university or in a major, only the median of employed graduates who meet the criteria above.
What Question Does Average Graduate Salary Answer?
With all the caveats above, one is tempted to say these median salaries do not answer any useful questions about graduates of different colleges or graduates with different majors.
When we constructed this report, we had this question in mind:
- Imagine you are sitting at your bachelor’s degree graduation ceremony, and you look around: what will your classmates typically be earning 2, or 20, years from now?
When thinking about this question, I naturally imagined only the people who are working in my definition of a “typical” earner. For example, those who choose not to have a regular job, e.g., stay at home parents, graduate students, people trying to launch a band while working part-time as a barista, or graduates living off a trust fund, were not included in my idea of typical earner.
Why is this question interesting? What people become in their later working lives is there as a seed during the college years.
Whether a college molds this future, its admissions committee selects students with particular aspirations, or the students self-select, the net result is that colleges vary widely in what their graduates typically do in the working world.
This wide variation in occupations is reflected in the startling wide range of typical graduate salaries across universities.
You could still argue that the selection criteria above do not define the best data sample to address this question. In my next post, I will explain our reasoning, including the “no higher degrees” criterion.
Universities In and Out: Administrators Have Sharp Eyes
The first emails we received concerning our College Salary Report were from university administrators at schools not included on the lists. Here is how we chose the schools included:
- Our goal was to include the ~100 largest bachelors degree granting schools
- We also included other schools which are representative of other school types: smaller state universities, liberal arts colleges, national research universities, religious schools, engineering schools, design schools, etc.
- We could have produced results for over 1000 US universities and colleges
- Time and resources limited us to about 320 for the 2008 report
We plan to produce this report annually. In the future, we hope to expand to include more schools.
To compile the 100 “largest”, we took the schools for which we had the most data, and assumed it correlated with graduation rates over the last 40 years or so, which would go into our starting and mid-career datasets.
The only school, so far, that should have been in the list and was not, is Temple University in Philadelphia. We were a little stumped by Temple, because we were uncertain whether it was public or private, so couldn’t decide where to categorize it.
Given limited time, we passed on including Temple. We have since learned about College Navigator; the Department of Education says Temple is public. After a little more digging on the Temple website, we agreed. Any school that gets ~$200 million directly from the state is public. 🙂
There are many, many, schools that graduate 2000 to 5000 bachelors degree a year, and fell just outside the top 100. For example, Weber State University (Ogden, Utah) is typical: with ~2000 bachelor’s graduates a year, it is clearly a large university.
Just for fun, here are the basic data for these two schools:
- Mid-Career Median Salary
- Weber State University: $72,400
- Temple University: $78,700
- Starting Median Salary
- Weber State University: $46,000
- Temple University: $41,800
Another interesting case: pay starts off higher at Weber State, but, by mid-career, Temple is ahead.
As mentioned in the College Salary Report Methodology, despite starting with 1.2 million profiles, we sometimes did not have enough data for smaller schools. For example, Claremont McKenna College clearly is interesting as an example of an elite small liberal arts college. We simply did not have enough data.
We were able to produce reports on other elite small colleges, so why not CMC? I suspect the reasons can be found in on the CMC website:
“…CMC is currently the youngest and smallest college ranked in the U.S. News & World Report top 20…Fully 70 percent of CMC graduates go on to advanced degrees at prestigious institutions…”
Comparing “Big Green” to a “Yellow Jacket”
When human beings see a list with numbers, they want to turn the list into a ranking. Here at PayScale, we are no better.
It is tempting to see these lists as rankings, where the college with the highest mid-career median salary “wins” and the college with the lowest “loses.”
Remember Dr. Salary’s motto: “All aggregate statistics lie.” These medians roll together all kinds of incomparable attributes, like distribution of majors, student motivations for education, geography, etc.
Medians also tell nothing about how life will go for any graduate in particular.
My daughter is a high school senior. Am I encouraging her to apply to Dartmouth College, the school with the highest mid-career median? No.
What my daughter earns will be more affected by her choice of major and career, and actually completing college, than by the school. At $149,000 per year, the top 10% of University of Washington graduates here in Seattle earn more than over 50% of Dartmouth graduates. If she goes to U of W and majors in Physics, she may well earn more than if she goes to Dartmouth and majors in Religion.
Of course, money isn’t everything. My daughter may well live a happier, more fulfilling, life, after majoring in religion.
This is what compensation professionals call “total compensation.” 🙂
How does your salary compare to a the Dartmouth mid-career average salary? The PayScale Salary Calculator is a quick and easy way to compare positions. When you want powerful salary data and comparisons customized for your exact position, be sure to build a complete profile by taking PayScale’s full salary survey.