What’s your college degree really worth?

Posted by Shankar Mishra

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August 29, 2013

TheLadders reveals a new study that answers the age-old question, “Is a college degree worth the cost?”

Really? Summer is almost over? For a lot of us, that means it’s either back-to-school, or back to thinking about going back-to-school. Every September, students head back into the classroom, while some graduates contemplate higher education. But, what’s the right move for you? Is your degree doing you any good? How much money would you make (or lose) by heading back to the books? To answer these questions, we turned to our database of more than 6 million job seekers.

Let’s start by looking into the most basic question: Was your college degree worth it?

Immediately following graduation, it turns out the answer is “no,” since there is little differentiation between individuals with college degrees, and those without one.

That said, let’s not be so shortsighted. Most newly minted graduates take low-paying, entry-level positions after college and work their way up through ranks, so while the immediate benefit of a college degree seems nonexistent, the big payoff is typically seen over the entire course of a career.


This is what I’ll call the “Job vs. Career” trajectory. Individuals without a degree move slowly towards their highest earning potential, with somewhat stagnant early years. We do see growth in later years, possibly coming from specialized skills acquired through on-the-job training. Individuals with a college degree may start in the same compensation range, but grow exponentially over the course of their careers. At different milestones within an individual’s career, starting with the five-year mark, we see considerable incrementality for individuals with a college degree.


Ten years after graduation, individuals with a college degree will be earning about $3,400 more per year than their counterparts without a college degree. The compensation gap widens to about $25,000 more per year after 20-year mark.


The next question is whether this phenomenon continues as we look at individuals with graduate degrees. According to our data, not only does this trend continue, but the starting point is much higher for individuals with graduate degrees.

Furthermore, tCompensationhe career growth in early years is relatively higher for individuals with graduate degrees. By their 10-year anniversary in the workforce, individuals with graduate degrees are making an average of $15,000 more per year than individuals with undergraduate degrees, and $18,000 more per year than individuals with no college degrees.


Taking it a step further, we assessed key industries and found considerable differences in overall compensation. Of course, the implicit relationship here is that industries with higher average compensation levels also tend to have a higher percentage of individuals with college degrees. The following chart highlights how different industries fare against the industry with the lowest average compensation – “Education.” The “Biotech” industry leads the pack with compensations 40% higher than the “Education” industry. 

Here are some key takeaways from the distribution of compensation across industries:

  • Education requirements are generally higher in industries with higher compensations
  • Three of the four highest-compensated industries on TheLadders have a workforce where more than 80 percent of professionals hold at least a four-year degree
  • Besides the four highest-paid industries (financial services, computer science, consulting, and biotech), marketing is the only industry where more than 80 percent of its workforce holds at least a four-year degree

My conclusive school of thought is that a college degree will certainly assist with financial success over the course of a career. The likelihood of financial success grows even higher with a graduate degree. Of course, the level of financial growth varies by industry, but a college degree is certain to help with financial growth irrespective of industry.


Shankar Mishra is the Vice President of Data Science and Analytics at TheLadders. When he is not working to find a simpler solution to difficult problems, he is brainstorming ways to leverage available data to tell a good story. Some of this brainstorming may very well take place on a golf course with three strangers in his foursome.


Topics: TheLadders Insights