The financial return to education

Your choice of university degree can have a large impact on how much money you make throughout your career, a comprehensive new study has found.

The nonprofit organization Georgetown University Center on Education and the Workforce has found that graduates with degrees in subjects like engineering and pharmaceutical sciences earn $3.4 million more in their lifetimes than those with degrees in lower-paying fields such as early childhood education and social work.

“We’ve known for a while that all degrees are not created equal, that your major has a large effect on your ability to get a job and work your way up a career ladder,” said Anthony Carnevale, the center’s director and the report’s lead author.

Researchers at the center took data from 2009-2013, compiled by the Census Bureau’s American Community Survey, and analyzed lifetime median wages of college-educated workers between 25 and 59 years of age.

Douglas Webber writes, in his article on whether a university degree is financially beneficial, that “The return to education varies greatly by institutional quality, discipline, and individual characteristics.” Whilst university education is the key to greater financial success for most people, Webber says that “the benefits of a four-year degree may not outweigh the costs for everyone, especially in light of high tuition costs and different rates of return for different college degrees.”

John V. Winters writes, in his article on whether society benefits from an individual's higher education, that “Science, technology, engineering, and mathematics (STEM) graduates appear to have strong external effects (on the economy), due to their role in stimulating innovation and economic growth.”

Winters also writes that increased education levels benefit the economy, society, and the individual undertaking the higher education: “Research finds that increased average education levels in an area are correlated with higher earnings, even for locals with relatively little education.”

Find out more here.

Related articles:
Is the return to education the same for everybody? by Douglas Webber
Do higher levels of education and skills in an area benefit wider society? by John V. Winters