You might want to earn a master’s degree for the potential increase in earnings it may deliver. But there’s more to going to grad school than the chance for extra income, especially because the payoff varies by occupation.
In 2013, the median annual wage for full-time workers ages 25 and over whose highest level of education was a master’s degree was $68,000, compared with $56,000 for those whose highest level was a bachelor’s degree—a $12,000 a year wage premium. 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.
Potential wages are just one of the factors to consider before embarking on a graduate education. In addition to showing how much more—or less—workers who had a master’s degree earned compared with workers who had a bachelor’s degree, this article highlights other questions to think about when deciding whether to pursue a master’s degree.
Wage premiums for a master’s degree
In some occupations, you’re likely to need a master’s degree to qualify for entry-level jobs. In others, a master’s degree may not be required, but having one might lead to advancement or higher pay.
This article focuses on several career fields in which workers often earn more with a master’s degree than with a bachelor’s degree. These career fields are discussed in the following sections:
- Healthcare and social service
These areas are discussed in order of the number of degrees conferred, from most to least, according to 2012–13 data from the National Center for Education Statistics (NCES).
The analysis of wage premiums uses 2013 American Community Survey (ACS) data for full-time wage and salary workers ages 25 and over. It compares median annual wages, for workers who had a master’s degree with those for workers in the same occupation who had a bachelor’s degree. These data do not account for experience, training, and certifications, which may, in turn, account for wage differences. The median wage is the point at which half of workers earned more than the amount, and half earned less.
In each section below, tables show select occupations that reflect a wage premium when obtaining a master’s degree in the field. The analysis focuses on the percentage wage premiums, or percentage difference in the wages for those holding a master’s degree compared with those in the same occupation who have a bachelor’s degree. The tables include data for both percentage and numeric wage premiums.
There could be lots of reasons why workers with a master’s degree had higher or lower wages than did those who had a bachelor’s degree. Master’s degree holders, for example, might have qualified for better paying jobs and have earned more than their counterparts who had a bachelor’s degree. Or bachelor’s degree holders—especially in occupations in which minimum educational requirements are increasing—might have had more years of experience and, as a result, might have had higher wages than workers with a master’s degree.
More master’s degrees were awarded in business than in any other field, during 2012–13. And among all occupations in 2013, business, financial, and sales occupations had some of the highest wage premiums for workers with a master’s degree.
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.
However, in some business occupations, having a master’s degree may not pay a premium. Training and development managers with a master’s degree, for example, had a 6-percent lower median wage than did these workers with a bachelor’s degree.
More than 1 out of every 5 master’s degrees was awarded in education in 2012–13. And the payoff for these degrees was usually relatively high.
Education administrators had the highest percentage wage premium, with 44 percent higher wages for master’s degree holders than for bachelor’s degree holders. The wage premium for preschool and kindergarten teachers was nearly as high, at 43 percent.
The lowest wage premiums were for postsecondary teachers, who frequently needed a Ph.D. to qualify for entry-level jobs. About 30 percent of these workers had a master’s degree, about 13 percent had a bachelor’s degree, and nearly all remaining workers had a doctoral degree. Postsecondary teachers without a doctoral degree might work as a graduate teaching assistant or qualify to teach a subject such as nursing (with a master’s degree) or vocational education (with a bachelor’s degree).
Healthcare and social service
The fast-growing fields of healthcare and social service were common for master’s degree awarded during 2012–13. Many occupations in these fields had wage premiums for a master’s degree.
Physician assistants with a master’s degree had a median wage that was 44 percent higher than that of workers with a bachelor’s degree—the biggest wage premium of the occupations in table 3. Prospective workers might want to get a master’s degree anyway, and not just for a higher wage: By 2020, the few remaining bachelor’s degree programs that prepare workers for this occupation will be phased out.
Other occupations in this group that are not shown had a wage premium for master’s degree holders over bachelor’s degree holders, but the proportion of workers with a master’s degree varied. For example, nearly 80 percent of nurse practitioners and nurse midwives had a master’s degree, while only about 6 percent of these workers had a bachelor’s. In contrast, about 7 percent of clinical laboratory technologists and technicians had a master’s degree, while more than 40 percent had a bachelor’s.
Not all healthcare and social service occupations had wage premiums for workers with a master’s degree. For example, even though occupational therapists typically need a master’s degree to enter the occupation, there was no difference in median wages between workers with a master’s degree and those with a bachelor’s degree. Occupational therapists are one of several occupations that may be affected by education requirements that have changed: The most experienced workers, who are also likely to have the highest pay, may have started working before a master’s degree became the minimum requirement.
Science, technology, engineering, and mathematics (STEM) fields also had many master’s degree awarded during 2012–13. STEM occupations in which workers with a master’s degree had wage premiums. But not all occupations in these fields had a payoff for this type of degree.
Mathematicians, statisticians, and workers in other math-related occupations had a 33 percent higher wage with a master’s degree than did those with a bachelor’s degree, the highest of the occupations. Computer systems analysts and computer programmers are among the other STEM occupations that had a wage premium for master’s degree holders.