In my last post, University Graduate Salaries: Which Schools Payoff?, I discussed the methodology behind PayScale's College Salary Report: Best Colleges & Degrees.
Advanced degrees in medicine and, to a lesser extent, in law, business, and other fields, can increase a bachelor's degree graduate's future earnings by opening up high paying jobs that are not otherwise accessible.
We left out graduates who earn advanced degrees when calculating the average salaries used to compare schools and degrees. Why? I'll look at the answer in this post.
Are you being paid like an employee with a doctorate in Medicine, or in English? Use the PayScale Salary Calculator to discover whether that advanced degree means more pay in your current career, or whether you should look for a new one.
College Graduate Salaries Not Included
A quick refresher: our education package compares schools and majors/degrees based on median annual salaries:
- for bachelor's degree graduates, who have not gone on to earn 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.
Who was excluded by these rules for defining the data set? In addition to graduates with advanced degrees, we did not include these graduates when calculating the median:
- Unemployed graduates: probably not more than a few percent, based on aggregate government statistics
- Graduates who are stay at home parents: likely a large fraction of "mid-career" graduates
- Graduates who do not work for pay (volunteers): may be significant at religious schools with a missionary focus
- Graduates who do not work full-time: hard to estimate how many work only part-time
- Graduates who work for themselves: may be significant, particularly small business owners and consultants
- Graduates who are paid per project: free-lance writers, architects, etc.
How big a difference do these choices make in the average college graduate salaries?
The largest effect on the median salaries is likely from stay at home parents. Mid-career graduates are around 42 years-old. It will be common for people in this age range to be married and have children at home.
An interesting government study of 1993 graduates 10 years later shows the effect. This study found 27% of female bachelor's degree graduates, and 5% of male, were not working, or were working part-time, in their early thirties. In the US, it is more common for women to stay home with children than men, which explains most of this difference.
A substantial fraction of the stay at home parents would still be out of the full-time paid workforce by the time they reached the PayScale "mid-career" age range, and may have already been out of the workforce in the starting career age range.
Interesting side note: this government study also uses only the wages of full-time workers when calculating the average salaries of college graduates 10 years later.
Why No Advanced Degrees? An Example
We did not include graduates of a college who went on to earn an advanced degree in our average college salaries. Why?
For starting career salaries, advanced degree holders would be largely excluded anyway. Since the starting career data are intended to be of graduates 2 or so years after receiving their bachelor's degree, advanced degree holders simply would not have had enough time to earn the degree, and enter the workforce as full-time workers, to be included in the starting career data set.
Mid-career graduates who earned advanced degrees were excluded for fairness. Which institution should get the credit for the future wages – the undergraduate school, or the graduate school?
Based on my experience in the Ph.D. physics program at Yale University, the answer is the graduate school. The students I knew well at Yale came from Swarthmore (me), Carnegie Mellon, Auburn, and University of Massachusetts, Lowell.
Our salaries now are more similar than the median mid-career salaries of these schools would suggest. This implies it is the Yale graduate degree, not the particular undergraduate institutions, that determined our salaries.
One example does not prove the graduate school where the credit should go. Perhaps it was the physics major in undergrad that is the key factor for our similar pay now 🙂
In the end, it seems more fair to attribute earnings of advanced degree holders to the advanced degree program.
For students who know their long term plans include graduate school, they should compare undergraduates schools based on each school's success at getting its students into graduate school.
Not All Advanced Degree Raise Salaries
People think including advanced degree holders would raise a schools median graduate salary, because they naturally focus on the doctors, dentists, and top-paid lawyers and MBAs. Are these graduates really typical?
The US census looks at "educational attainment" or the highest degree people have earned. Of the 22 million people 40 to 45 years old in 2007:
- 22% earned a Bachelor's degree, but no higher degree
- 7% earned a Master's degree (including MBA, MSW, etc.), but no higher degree
- 1.4% earned a Professional degree (MD, JD, etc.), but no higher degree
- 1.2% earned a Doctoral degree
Hence of all bachelor's degree graduates:
- 29% earned a higher degree
- Only 4.5% of those were professional degrees, which likely raised their future pay
- 4% earned Ph.D.s, which likely lowered their future earnings 🙂
Keep in mind that many advanced degrees, like Masters of Education, Masters of Social Work, or Doctorate of Divinity, lead to careers in education and service. These careers are typically paid less than may of the careers included in our averages.
Advanced Degrees That Do Not Pay: English
English is an example of advanced degrees not leading to higher pay. Consider the pay of experienced workers with a BA, MA, and Ph.D. in English. Based on our research center, for employees 44 to 65 years old,
- the median salary of English BA holders is $61,600, and is the highest
- Master's holders earn $52,500
- Master's in Teaching holders earn $55,400
- Ph.D. degree holders earn $59,200
While our research center data set is not as carefully constructed as the data set used in College Salary Report, it is indicative.
This points to an important effect: the largest group to get master's and doctoral degrees are teachers, and teaching is not a highly paid career path.
About 20% of bachelors graduates earn a master's degree. Given that about 25% of all bachelor's degree holders work as educators, a very large number of those masters are held by teachers. Why do teachers get master's degrees? Typical contracts reward teachers who earn advanced degrees with increased pay.
The net result is that, at many schools, including advanced degree holders in the median salary of bachelors graduates may actually lower the average, because more teachers will be included in the averages.
This may even be true at elite schools, where the large number of future Ph.D.s they graduate may well cancel out the doctors, lawyers, and top MBAs.
However, if Cal Tech or Reed College alumni want to whine that their school's median salary would have been even higher with Ph.D.s included, they are free to do so 🙂
Would adding an advanced degree help or hurt your 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.