Considering the financial expense and time required to pursue higher education, does earning a degree in a STEM field pay off in the long term? Here we look at the correlation between degree credentials and earnings potential.
Given that one of the key deciding factors for many people when choosing a degree to pursue is which jobs pay the most, it is important to understand the correlation between types of formal education and levels of earnings potential, particularly for a STEM-educated worker.
Based on an analysis of census and education statistics, a report from State Higher Education Executive Officers in December revealed that Americans who earn a bachelor’s degree have a median income of $50,360, compared with a median of $29,423 for people with only a high-school diploma. Those with an associate’s degree earn some $9,000 more a year than those with only a high-school diploma. Those with a graduate degree have a median income of $68,064, about one-third more than those with a bachelor’s degree.
Over the course of a career, college graduates with a bachelor’s degree can expect on average to earn about $2.4 million, about $1 million more than those with only a high school diploma and about $600,000 more than those with a two-year associate degree, according to one of two recent reports from the U.S. Census Bureau. The lifetime earnings rise even more notably with higher levels of academic degrees: $2.8 million for those with a master’s degree, $3.5 million for doctorate degree holders and $4.1 million for those with professional degrees.
Students’ choice of college major can have a big impact on their post-graduation earnings. Consider the broad field of engineering, specifically. Adults over the age of 25 with a bachelor’s in engineering topped the earnings list, with a median full-time income of $91,611, according to the Census Bureau’s accompanying study. Next highest, at $80,180, were those who majored in computers, mathematics and statistics.
In fact, of the top 10 undergraduate majors with the highest median salaries, eight were in engineering. Median earnings for those with a bachelor’s degree in fields including aerospace, chemical and mechanical were $75,000, according to a study by Georgetown University’s Center on Education and the Workforce (CEW). The individual major with the highest median earnings was petroleum engineering, at $120,000, followed by pharmaceutical sciences at $105,000, and math and computer sciences at $98,000.
Similarly, in PayScale’s 2012-2013 College Salary Report, the top 10 highest-paying majors for bachelor’s degree holders were STEM related, led by petroleum engineering, with an average mid-career salary of $163,000, followed by aerospace engineering, which pays an average $118,000.
All else being equal, STEM degree holders enjoy higher earnings, regardless of whether they work in STEM or non-STEM occupations, according to the U.S. Department of Commerce.
For workers in a STEM field, 63 percent of those with an associate degree make more money than someone with a bachelor’s degree in the humanities or social sciences, according to a separate study from CEW.
Vocational certificates have been found to outperform two-year and four-year degrees in some cases. On average, workers with a professional certificate earn 20 percent more than workers with only a high school diploma, according to CEW. The value of the certificate is tied to being in the right field, and working in that field. For instance, men who work in computer and information services earn $72,498 per year, which is more than 72 percent of men with an associate degree and 54 percent of men with a bachelor’s degree. In general, the STEM-focused certificates tend to have the best return on investment.
Even as the costs associated with formal education continue to rise, these data indicate a clear correlation between a higher level of STEM education and larger financial returns.
“STEM workers fill our nation’s research and development facilities and drive our nation’s innovation and competitiveness by generating new ideas, new companies and new industries,” the U.S. Department of Commerce wrote in an early-2012 report, in consultation with the National Economic Council. “Commensurate with their importance in driving economic productivity and growth, workers in STEM fields earn more on average than workers in other fields.”