Higher levels of education tend to lead to higher lifetime earnings, but other factors such as occupational field, gender, race, and location also can tip the scales, according to a new report from Georgetown University’s Center on Education and the Workforce (CEW).
Overall, workers with more education earn more
For their “College Payoff” analysis, CEW researchers looked at data from the U.S. Census Bureau’s American Community Survey on 25- to 64-year-olds working full-time, full-year between 2009 and 2019. Overall, their findings reinforced previous studies finding that postsecondary education “pays off in the labor market.”
Medium lifetime earnings, for instance, increase with each level of education, ranging from $1.2 million for those with less than a high school diploma to $1.6 million for high school graduates, $2 million for associate’s degree holders, $2.8 million for bachelor’s degree holders, $3.2 million for master’s degree holders, $4 million for doctoral degree holders, and $4.7 million for those with professional degrees.
In addition, the researchers note that more education tends to confer greater overall economic stability. They point out that job losses were concentrated among workers with lower levels of education during the pandemic and recent recessions.
Closer look reveals a more complex equation
When it comes to individual outcomes, however, the value of postsecondary education is “part of a complex equation” in which “other factors—from field of study and occupation to gender, race and ethnicity, and location—drive differences in earnings,” CEW writes.
“More education doesn’t always get you more money,” CEW director and lead report author Anthony P. Carnevale said in a release. For instance, the analysis revealed that 16 percent of high school graduates and 28 percent of associate’s degree holders were earning more than half of workers with a bachelor’s degree. Moreover, one-fourth of bachelor’s degree holders earn more than half of workers with a master’s or a doctoral degree.
Field of study, gender, race, location appear to play a role
Exploring variation in lifetime earnings, researchers found several factors that appeared to shape workers’ trajectory, including:
- Choice of undergraduate major and occupation: Architecture and engineering, computers, statistics, mathematics, and business majors were associated with the highest median lifetime earnings among bachelor’s degree holders. Undergraduate majors in education, psychology, and social work, meanwhile, were associated with the lowest lifetime earnings among bachelor’s degree holders.
- Gender: Among workers with bachelor’s degrees, the median lifetime earnings amount for women was $2.4 million, compared with $3.3 million for men. Similar patterns were found across all education levels.
- Race and ethnicity: Among workers with high school diplomas, associate’s degrees, and bachelor’s degrees, white workers had the highest median lifetime earnings. Asian workers had the highest median lifetime earnings among master’s degree holders.
- Location: Even after adjusting for regional cost-of-living differences, certain locations were associated with higher lifetime earnings at certain levels of education. For instance, among workers with a high school diploma, median earnings were highest in Wyoming, Alaska, and North Dakota. The District of Columbia, Connecticut, Virginia, and Maryland were the highest-earning locations for bachelor’s and master’s degree holders.
A call for thoughtful career counseling
The CEW report concludes with a call to expand and improve the career counseling system. “Students need professional guidance on the economic outcomes of college and career pathways before they make one of the biggest decisions of their lives,” said Ban Cheah, report author and CEW research professor and senior economist.
However, many public school counselors are stretched thin. NPR reports that, as of 2014-15, the national K-12 student-to-counselor ratio was approximately 482:1, according to the National Association for College Admission Counseling.
CEW says that, ideally, students would begin working with career counselors as early as middle school and emerge from high school with an understanding of postsecondary education and workforce options, and their implications for lifetime earnings.