Does Education Make a Difference in Salary?

Overall, college graduates tend to make more money than those who haven't earned a degree. In fact, more education leads to higher salaries on average. However, a closer look at the numbers, especially by major, shows that this is not the case for every discipline.

If you're deciding whether pursuing an advanced degree is the smart choice for you, consider the salary breakdowns by educational level in our report below. You may also want to consider some of the alternatives, such as trade schools or an associate degree program.

What Is the Relationship Between Education and Income?

Education and Income

According to 2022 data from the U.S. Bureau of Labor Statistics (BLS), there is a strong correlation between education and income.^{Note Reference [1]}

• Overall, people 25 years and older earned a median annual income of $75,980.
• Individuals with a bachelor's degree or higher made a median income of $118,300.
• Those with a college degree made nearly 250% more than those with less than a ninth-grade level of education and 130% more than those with just a high school diploma.

Education and Employment

Salary isn't the only factor to consider when thinking about the benefits of education. According to the BLS, people who attain more advanced degrees experience lower rates of unemployment.^{Note Reference [4]}

• The average unemployment rate for individuals with an educational level of less than a high school diploma was 5.5%.
• In contrast, bachelor's degree holders had an unemployment rate of 2.2%.

Boosting Your Salary Without a Four-Year Degree

There are more alternatives to getting a traditional four-year degree than ever. Some high-paying jobs that don't require a degree include air traffic controller, with a median salary of $132,250, and elevator installer and repairer, with a median salary of $99,000.^{Note Reference [6], Note Reference [7]}

Another option is to accumulate credentials — often referred to as stackable credentials — while working toward a degree. These credentials can be in anything, from Arabic to cybersecurity, and can give students a competitive edge on the job market.

Which Majors Are Worth an Advanced Degree?

It may not always be worth it to pursue an advanced degree. In this section, we compare the percentage difference in salaries between a bachelor's and master's degree by discipline. Note that a master's degree typically takes two years to complete and can cost over $57,000.

• Biology majors with a master's degree earned nearly 60% more on average than biology majors with a bachelor's degree.^{Note Reference [2]}
• History majors who earned a master's degree, however, experienced less than a 14% increase in salary.^{Note Reference [2]}
• Philosophy majors with master's degrees actually experienced a decrease of 6.9% in their salaries on average.^{Note Reference [2]}

The College You Go to Can Affect Your Job

Where you get an education can also make a difference in salary — at least when it comes to ultra-prestigious colleges and universities.

Ivy Plus schools refer to a group of 12 highly selective private colleges including the eight Ivy Leagues and the University of Chicago, Duke, MIT, and Stanford.

Less than 1% of people in the U.S. attend these 12 colleges. However, economists at Harvard and Brown found that graduates of Ivy Plus schools disproportionately make up those in the top 0.1% of earners. They also disproportionately hold political positions and attend Ivy Plus graduate schools.^{Note Reference [3]}

It's important to note that students from families in the top 1% of earners are twice as likely to attend an Ivy Plus college compared to those from middle-class families with comparable SAT/ACT scores.^{Note Reference [3]} Ivy Plus education correlated with higher salaries, but Ivy Plus students also came from far wealthier families. In short, Ivy Plus graduates' post-college wealth and earnings may not directly result from having an Ivy Plus degree.

While attending an Ivy Plus school might give you an advantage in the job market, it isn't the be-all and end-all. There are other important considerations when thinking about whether the college you go to matters. In your industry, for example, employers may privilege work experience or a particular skill set over school name.

Lastly, graduates of big-name private institutions often have more student debt compared to public college attendees.^{Note Reference [8]}