Posted by: Louis Lavelle on August 5, 2011
Want to make a lot of money at your job? It’s no secret that it helps to be white, male and have at least a bachelor’s degree. But a new study suggests just how big an advantage that is.
The study by the Center on Education and the Workforce at Georgetown University examines what a college degree is worth, and reiterates what many already know about the impact of higher education on lifetime earnings. But it also sheds new light on the disparity in earnings among different ethnicities and genders that hold the same degree.
What’s not surprising is that the higher the level of education, the greater the paycheck—MBAs and other graduate degrees fetch a premium in the job market over workers with bachelor’s degrees, and those with a bachelor’s out-earn those with a high school diploma. But here are some things that were surprising:
Not surprising: Women earn less than men.
Surprising: Over the course of a lifetime, a woman with a bachelor’s degree earns about the same as a man with some college education, about $1.9 million. A woman with a doctorate earns nearly $2.9 million, slightly more than a man…with a bachelor’s degree ($2.6 million).
Women with professional degrees earn $1 million less over a lifetime than men with the same degree. And to earn the same as a man with a doctorate? You'd have to be a man with a doctorate.
Anthony Carnevale, director of the center, said he didn't have a reason for the difference in earnings, but said the differences existed even when controlling for occupation and education and considering only full-time, full-year work. He said it was comforting to see women responding by seeking more education at higher rates of men.
Not surprising: African-Americans and Latinos earn less than whites, even when educational attainment is the same.
Surprising: African-Americans and Latinos with master's degrees have lower lifetime earnings than whites with bachelor's degrees. Carnevale said the situation was worse because these minority groups are not seeking degrees beyond a bachelor's at the same rates as whites.
Not surprising: Employees with master's degrees make more money than those with a bachelor's degree.
Surprising (or maybe not): The lifetime earnings of MBAs are the greatest of all the master's degrees and the MBA has the greatest earnings leap from a bachelor's degree to a master's.
"In the case of business administration, get an MBA. Don't listen to what anyone else says," Carnevale said.
The pool of MBAs may be crowded, he said, but better to be in that pool than in the pool of bachelor's degree holders.