This is going to take some explaining (from Georgetown’s Center on Education and the Workforce)…
First, let’s provide some context for the chart:
- Measures average earnings based on college major, degree attainment (high school, college, graduate) and level of experience.
- The average earnings for recent high school graduate is $24,000 (about $12/hour) and for an experienced high school graduate is $36,000 (dotted lines on the chart).
- For engineering majors, the average pay for a recent college graduate is $57,000; for an experienced college grad, the figure rises to $93,000. For a student with a graduate degree (Masters) in engineering the comparable figures for a recent graduate student is $78,000 and with experience that rises to $114,000.
- Recent college graduate = ages between 22 and 26 with college degree
- Experienced college graduate = ages between 35 and 43
- Based on data from American Community Survey for 2011-2012
Here are a few questions to get the conversation started. I created Value of College Degree and Experience spreadsheet which presents this data in tabular format to make these calculations easier:
- What is the value of experience by major, which can be calculated by comparing average starting pay of recent college graduates with average pay of experienced college graduates?
- Which graduate degree has the best payoff when comparing the average pay of an experienced college graduate in that major with an experienced graduate degree holder in that major?
- Which graduate degree has the lowest payoff when comparing the average pay of an experienced college graduate in that major with an experienced graduate degree holder in that major?
- Compare the pay premium of average salaries of recent college graduates and recent high school graduates with the pay premium for experienced college graduates and experienced high school graduates. Does the pay premium get larger over time? Why do you think this is the case?
- By degree, what is the average pay premium for an experienced college graduate when compared to an experienced high school graduate? Which degree has the highest average pay premium? Which has the lowest?
Now let’s get out of the weeds. What are the key takeaways in looking at this data?
- Significant differences in pay levels driven by major and highest educational attainment
- The value of a graduate degrees varies significantly among different majors
- The pay premium for attaining a college degree vs. a high school degree expands with experience.