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Here's how much extra income your college degree is worth


How much extra income your college degree is worth - San Francisco Business Times

It pays to have a college diploma — and preferably more than one.

The linkage of education and income couldn't be clearer in new data collected by the U.S. Bureau of Labor Statistics (BLS). The typical worker with a master's degree earns 20 percent more than a colleague who holds a bachelor's degree and 98 percent more than somebody who never went beyond high school.

And there's a second benefit. The danger of unemployment declines dramatically as the level of educational attainment rises.

BLS calculates the median weekly earnings for workers who possess eight sets of educational credentials. Here are the rungs on that ladder, based on the medians for 2014, the latest data available:

  • Professional degree: $1,639 per week.
  • Doctoral degree: $1,591.
  • Master's degree: $1,326.
  • Bachelor's degree: $1,101.
  • Associate's degree: $792.
  • Some college, no degree: $741.

High school diploma: $668.No high school diploma: $488.These differences compound over time. A 2011 U.S. Census Bureau study concluded that the typical worker with a master's degree would earn $2.8 million over his or her lifetime, compared to $2.4 million for someone with a bachelor's degree, $1.4 million for a high school graduate and $1.1 million for a high school dropout.

It's little wonder that the Bureau's study concluded, "The implications of varying educational levels can be quite large — literally millions of dollars in variation."

The key reason for these disparities, of course, is the wide range of high-paying jobs that are available only to college-educated adults. But another factor is the unusual stability at the upper end of the ladder. These are the 2014 unemployment rates for all eight rungs, again tabulated by BLS:

  • Professional degree: 1.9 percent.
  • Doctoral degree: 2.1 percent.
  • Master's degree: 2.8 percent.
  • Bachelor's degree: 3.5 percent.
  • Associate's degree: 4.5 percent.
  • Some college, no degree: 6.0 percent.
  • High school diploma: 6.0 percent.
  • No high school diploma: 9.0 percent.

The strong correlation between school credentials and financial success compelled American City Business Journals to include two educational categories in its 12-part formula to rate local affluence.

Communities and ZIP code territories across America were rated according to the percentages of adults (25 or older) with bachelor's degrees and advanced degrees. The latter category encompassed the top three rungs of the educational ladder.

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Hmmmm... $400K extra over a working lifetime for a Masters rather than a Bachelors degree doesn't seem like the world's best investment.

It's safe to say you shouldn't get a Masters degree for investment.

You should get it because you enjoy taking your learning to that level.

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