We recently discussed the connection between completing a college degree program and your overall earning power as a working professional. Even with the well-publicized and constantly rising cost of college, evidence suggests that a higher education is still a worthy investment. In the simplest of terms, college graduates who earn bachelor’s degrees from accredited universities tend to earn more money both at the entry level and throughout their lifetime than those with a high school diploma or less.
Of course, there are many variables in your earning potential including your field of study, your geographic location, and even your lifestyle habits. But in the simplest terms, this level of educational attainment tends to contribute to your potential higher earnings.
It should therefore come as no surprise that the same premium applies for those who earn a graduate degree. According to the Bureau of Labor Statistics (BLS), working professionals with a bachelor’s degree earned a median weekly pay of $1334 in 2021.
During the same year, those with a master’s degree earned a median weekly pay of $1574. The jump in pay was even greater for those with a doctoral degree. Graduates with this top-level terminal degree took home a median weekly pay of $1909. And the highest of all earners were those with advanced professional degrees–such as doctoral degrees in law or medicine. Graduates from these advanced professional degree programs earned a weekly median pay of $1924.
These figures suggest that students who go on to earn a graduate degree in their field will be in line for higher earnings and stronger career prospects. However, there are a lot of nuances to this suggestion. There are quite a few factors that you’ll want to consider before deciding whether, and where, to pursue a graduate degree.
As with college graduates, those who complete graduate school do afford themselves unique opportunities for professional advancement and higher earning potential. But, just as with undergraduate education, the outlook for those completing grad school differs widely according to variables like your chosen industry, the reputation of the institution granting your graduate degree, and your overall career goals.
Each of these factors will figure into your ultimate decision on whether or not to pursue an advanced degree. These factors will also help you determine the best type of graduate school for your needs, and give you a sense of how much you should invest in this credential based on the likely improvement to your earning potential.
While we can’t tell you what to do, or where to do it, we can provide you with a closer look at the factors you’ll need to consider if you’re thinking of investing in the next step in your higher education.
A Graduate Degree is Necessary in Some Fields
Some Jobs Require a Master’s Degree
Before even considering the question of wage premiums for those with a graduate degree, we should first recognize that your specific career may actually require you to earn a graduate degree.
For instance, in some states, teachers may be required to earn a master’s degree in education in order to earn tenure or serve as the head of a department. In this case, you might consider the master’s degree a required credential. The same may be true of those who wish to become school guidance counselors, occupational therapists, and social workers. In each of these fields, the master’s degree may be the preferred or required credential.
Pro-Tip: If most of the jobs in your intended field say “master’s preferred,” you might as well think of it as required. The competition certainly will.
Other jobs for which a master’s may be either preferred or required are:
- Speech Pathologist
- Human Resources Manager
- Political Scientist
Each of these positions may require the research experience, leadership skills, and specialized knowledge you’ll gain through your graduate degree program.
Some Jobs Require Professional Degrees
As we noted in the introduction to our discussion, those with advanced professional degrees are among the highest paid members of the American labor economy. Of course, these students pay for the privilege through mandatory advanced degree programs. The length of a professional degree program can vary widely depending on your intended profession.
If you plan to practice law, you will be required to go to law school, earn your juris doctor, and pass the bar exam in your state. Law school can usually be completed in two to three years. Allow another several months to a year in order to prepare for and pass the bar.
If you plan to become a medical doctor, you will be required to complete medical school and practicel medicine as a student resident under the mentorship of those already working in the field. Medical school may take about two years to complete but residency may take between three and seven years to complete. Pursuing an area of specialization may require longer still.
These are two of the most popular advanced professional doctorate degrees as mandated by their respective fields.
Some Jobs Require a PhD
If you plan to become a professor or a researcher, a doctor of philosophy, a doctor of arts, or a doctor of science is likely an absolute requirement. This is true in an extremely wide range of fields, where earning a doctoral degree will qualify you to teach at the post-secondary level, lead a research team, consult government policy development, and much more. You could serve in all of these capacities in any of the following roles:
- Systems Engineer
- Healthcare Administrator
- University Administrator
- Computer or Information Research Scientist
As the discussion above demonstrates, earning professional degrees at the master and/or doctoral degree level may be absolutely required in your field. In this case, earning the advanced degree is not simply a matter of securing your income potential but is in fact a threshold that you must cross in order to advance in your field.
Fortunately, in most of these cases, it also follows that you will be among the highest earners in your field. With that in mind, let’s dive a little deeper into the wage premium for those who complete graduate degree programs at either of these levels.
The Graduate Degree Wage Premium
The Master’s Degree Wage Premium
According to the Bureau of Labor Statistics, there is a clear and significant annual premium for those who do go on to earn graduate degrees. And this premium can have a significant cumulative impact over the course of a career. The BLS reports that the annual median pay in 2013 for all full-time workers 25 or older was roughly $56,000. By comparison, the median pay for those with a master’s degree was $68,000 per year.”
This average $12,000 difference per year often grows wider over time as advanced degrees create new pathways for career growth, including avenues that may not be accessible to those with an undergraduate degree in the same field.
For this reason, graduate school may be a great opportunity to pursue more specialized skills and knowledge. This can ultimately create more opportunities for leadership and advancement in high-growth and high-wage areas. Still, as we will discuss in the next several sections, “high-growth” and “high-wage” are pretty important qualifiers, at least if your objective is to assess the value of a graduate degree from the perspective of earning power.
After all, graduate degrees aren’t free, and they’re rarely cheap. You will pay for access to that wage premium. Therefore, it’s important to consider the actual impact this degree will have on your earning potential within your field. Will your wage premium justify the expense of your graduate degree?
Obviously, in order to answer that question, you’ll need a sense of what it might actually cost to earn a graduate degree.
The Doctoral Degree Wage Premium
As the BLS notes, those who earn their doctoral degree will, on average, earn substantially more than those with a bachelor’s degree, placing the earnings premium at about 26%. This sounds great, but a closer look calls this interpretation into question. That’s because the wage premium for those with a master’s degree, according to the Economist, is actually 23%. At only a 3% difference in wage improvement across the boards, it’s clear that there is a greater premium on earning a master’s than a doctorate.. This will factor into later questions about whether or not a doctoral degree is a worthwhile pursuit for you.
The answer will depend substantially on your field of study. As the section above shows, the question does not apply to those professionals for whom a doctorate or PhD is mandatory. This may describe, for instance, aspiring professors and physicians.
However, in other areas of study, the wage premium for earning a PhD may be minimal or even nonexistent. According to the Economist, “the premium for a PhD is actually smaller than for a master’s degree in engineering and technology, architecture and education. Only in medicine, other sciences, and business and financial studies is it high enough to be worthwhile.”
These figures also don’t fully reflect the high rate of non-completion among doctoral candidates as well as employment practices among doctoral candidates that can fairly be described as exploitative. Indeed, while becoming a full and tenured professor may ultimately help you realize your potential as a PhD earning a meaningful six-figure wage premium, you will likely serve long stretches of your educational pursuit holding academic positions that pay a literal pittance.
The Economist points out that the average PhD candidate at Yale may earn roughly $20,000 per year performing demanding teacherly duties. In 2021, Statista reported that the average high school graduate in the U.S. earned about $30,000 per year.
Unfortunately, today there are far more PhD candidates scraping through these low-income roles than there are job openings in the professoriate. This means that those who do complete their doctoral degrees may have an uphill climb not just in securing a job that matches the desired wage premium, but also in digging out of the negative wage gap endured over what might be nearly a decade’s worth of doctoral education.
The Cost of a Graduate Degree
The Cost of Master’s Degree Programs
Just as your potential earnings with a graduate degree discipline can vary substantially based on your chosen field, the cost of your master’s degree is subject to extremely wide variation as well. This cost will depend on a wide range of factors including the prestige of your institution, the course of study and, as a direct consequence of that course, the length of your program. The length of your graduate degree program may be particularly susceptible to variation.
Indeed, the Education Data Initiative, reports that master’s degree programs generally range from $30,000 up to $120,000. Within this extremely broad spectrum, the average cost of a master’s degree is $62,650. Most candidates will complete this graduate degree program in two to three years.
But a quick glance at the average cost of a master’s degree in several leading areas of study demonstrates the cost variation across the grad school landscape.
According to the Education Data Initiative, a master’s degree in education costs an average of $52,000; a master’s in the arts across a wide range of humanities such as English and history will cost something in the range of $65,880; and a master’s degree in one of the sciences will generally cost about $61,200.
As you can see, there is some variation in cost, but within the broader range of potential tuition rates, the impact of your chosen field on cost is modest, at least when compared to the potential variation in cost based on institutional reputation. Earning a master’s degree at a prestigious school like Harvard or Cornell University will likely cost you three to four times as much as you might spend on a master’s degree program at a public university.
Then again, many of the most prestigious institutions offer those select few who are granted enrollment free tuition, housing and even stipends for living expenses. This type of opportunity may be even more commonplace for those who gain enrollment into the nation’s most prestigious doctoral degrees. That’s great news for the select few who do gain access to this opportunity.
For those that don’t, the data suggests the cost of a doctoral degree can be quite high.
The Cost of Doctorate Degree Programs
The Education Data Initiative, notes that the potential cost of a doctoral degree can be extremely variable, much more so even than the master’s degree. Factors like your field of study, institution, and length of study will play major roles in determining the cost to you.
On average, doctoral candidates will spend about $103,700 to earn this degree. And there are readily evident cost variations between fields like Education ($98,900), Psychology ($115,500), and the variety of disciplines falling under the Doctorate of Philosophy/Ph.D. umbrella ($96,800).
But for a more direct look at just how widely costs can differ in the pursuit of your doctorate, consider some of the more extreme examples cited by the Education Data Initiative. For instance, you could earn a doctoral degree in education from St. Thomas University for roughly $48,620 over the course of three years. Or, you could pay something in excess $557,300 to earn your PhD from New York University.
Of course, there are plenty of options in between, but just how much flexibility you have in choosing between these options will depend on your field and your career goals. Some doctoral degree programs and dissertation projects simply demand a full eight years. And some ambitions simply require you to attend a prestigious and therefore costly institution.
For this reason, the average doctoral degree candidate will depart this program with a student loan debt of $126,800.
This is a princely sum of debt, which is to say that you really should do the math before you begin what could be a very lengthy process. Be sure the doctoral degree makes sense within the scope of your profession, with respect to your career goals, and through the type of institution you must attend to achieve these goals.
Getting Your Money’s Worth from Grad School
Is a Master’s Degree Worth It For You?
So now that we’ve taken a deeper dive into both the wage premium and the costs that come with pursuing a graduate degree, we’re in a much better position to determine whether or not it’s worth it for you.
Well, as the data above suggests, it really depends on the correlation between what you’ll likely spend and what you’ll likely earn. In fact, the Bureau of Labor Statistics warns “Not all workers earn a premium. In some occupations, workers with a master’s degree earned about the same as, or even less than, those with a bachelor’s degree.”
This is obviously something you’ll want to look out for. If your pursuit of a master’s degree is strictly an investment in deeper knowledge, specialized skill sets, and greater personal enrichment, then perhaps the wage premium won’t factor into your consideration.
Otherwise, there are numerous professions which simply don’t factor into the average wage premium that we see across all professions. For instance, you may benefit more from professional experience than additional educational credentialing in certain humanities such as writing, fine arts, or communications, where your advancement may be precipitated on other factors such as your personal portfolio; or in technical areas like computer science and professional engineering, where advancement may depend more directly on apprenticeship and licensing.
This doesn’t mean you can’t recoup your investment by parlaying a graduate degree into opportunities for leadership and specialization in your field. But more generally speaking, you are less likely to see a significant improvement in earning power in these areas than you might in business, education, healthcare and social service, or STEM. Here, the BLS specifies that a master’s degree has been shown to lead to substantially improved and statistically likely wage growth.
Indeed, earlier we discussed some of those fields where a graduate degree is absolutely mandatory. While the master’s degree isn’t necessarily mandatory in business, it is popular enough that is might as well be. The AACSB notes that more than 250,000 students were enrolled in Master of Business Administration (MBA) programs in 2022.
According to the BLS, that makes the MBA the most popular master’s degree in the U.S. According to the BLS, “More master’s degrees were awarded in business than in any other field, during 2012–13.”
The BLS also notes that there is a very good reason for its popularity. MBAs saw the strongest wage premiums among all professionals earning graduate degrees. And within the business discipline, some of the highest wage premiums were seen by those with MBAs concentrated in areas like business management, finance, and sales.
In other words, the MBA is the most common type of graduate degree awarded in the U.S. because it gets results. There’s considerable evidence that business students who pursue this degree will fare better than their counterparts with just a bachelor of business administration when it comes to earnings, leadership opportunities, and access to top organizations.
It’s also worth noting that specific subdisciplines within the field may offer even stronger wage premiums for graduate students. For instance, the BLS says that “Securities, commodities, and financial services sales agents had the biggest wage premium of any of these occupations: workers who had a master’s degree earned a wage that was nearly 90 percent higher than that for workers with a bachelor’s degree. Many of these sales agents earned a master’s degree in business administration (MBA), which may be required for high-level jobs.”
That’s quite a jump, one that would likely make a three year graduate school investment well worth it over the course of a lifetime.
But again, the BLS reiterates that students who earn their master’s degrees will usually enter their careers with steeper debt than their undergraduate counterparts. This is where differences in earning potential really matter.
The Education Advancement Initiative warns that those who pursue master’s degrees do carry greater debt into their careers than the average American. This means that it is particularly important to determine whether or not you are likely to see a substantial wage premium by earning a graduate degree. Otherwise, the investment could place you in a challenging financial position.
The Initiative notes that “Master degree holders carry on average 29% more debt in all categories, except retail cards when compared to the general public’s averages.”
Carrying an average of $46,798 in student loan debt as of 2022, the nation’s master’s degree holders also had 26% greater credit card debt than the national average.
All of this is not to suggest that a master’s degree isn’t worth it for you. It’s just particularly important to determine how much value this degree actually carries in your field. Be sure the wage premium justifies the expense.
Is a Doctoral Degree Worth It For You?’
If you’re considering a doctoral degree, you have even more to think about. That’s because the length of time you’ll spend on this degree can vary significantly depending on your field and your goals. This, in turn, can have a dramatic impact on how much your doctoral degree will actually cost you.
According to the Education Data Initiative, the average doctorate degree can take between four and eight years to complete. Obviously, this is quite a wide range, which means that the range of costs is also quite variable.
With a doctorate degree, the question you really have to ask yourself first is, “how necessary is this degree in order to achieve my career goals?”
Make sure you know the answer to this one from the start. While the rest of your degree pursuit will be spent asking and exploring meaningful questions within the scope of your career, be sure that this step is necessary and right for you. Many doctoral candidates suffer from academic disillusionment over the length, cost, and difficulty of the experience.
It helps to know that it’s all leading you down a path of personal and professional advancement.
Simply stated, if you’re becoming a medical doctor, you already know the answer to this question. The job obviously depends on it. The same is true if you plan to become a professor, conduct research or, quite simply, if it is your goal to rise to the top of your field. Those who parlay their doctoral degrees into careers in scientific inquiry, policy consultation, and organizational leadership are most likely to see the wage premium reported by the BLS. In this case, pursuing your doctoral degree is most likely worth it.
That said, our findings show that the differences in cost can be profound from one institution to the next. Remember, you actually have plenty of options. When you seek out a master’s, professional, or doctorate degree, make sure the cost matches up with your career goals. This is the best way to be sure that you’re actually getting your money’s worth.