Masters-as-new-entry-level

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The New Entry Level: Master’s Degrees

Twin Trajectories:

1.) Average middle class household earnings have greatly eroded since the recession.

Median Household Income:
(in 2012 dollars)[9]
1989: $51,681
1999:$56,080
2012:$51,017

With 85% of self-described middle-class adults saying it’s more difficult now than a decade ago to maintain their standard or living.[9]

2.) Earnings for bachelor’s degree or greater holders aged 25-34 have never been higher.

Median Monthly Earnings of 25-34 year-olds by Educational Attainment:

Bachelor’s degree:
1984: $3,399
1996: $3,643
2009: $3,836

Master’s degree:
1984: $3,875
1996: $4,159
2009: $4,772

Professional and doctorate:
1984: $4,315
1996:$5,415
2009: $5,799

Partially because millennials are the most educated generation yet:
generation || % high school graduates || % college graduates [1]

Silents (1965)|| 43% || 13%
Early Boomers (1979) ||39% || 24%
Late Boomers (1986) || 41% || 24%
Gen X’ers (1995)|| 33% || 25%
Millennials (2013)|| 26% || 34%

There are more ways to move up in the workplace than ever.

28% of employers value bachelor’s degrees less than they did 5 years ago[2]
31% of employers feel that recent graduates are unprepared or very unprepared
With nearly 3 in 5 employers believing that special training or skills is more important than traditional degrees.[6]

Leaving the Choice:
Skills vs. Greater Credentialing.

Professions whose main barrier to entry is skill-based:
Health Care
Information Technology
Public Service

Professions erecting greater educational barriers in hiring practices:

Education
Government
Research
Business

Specialization is good, but comes at a price

Six Figure Debt [3][4]
(% of graduates by program type with six figure student loan debt)
Undergraduate degree :.3
All graduate and professional programs: 15.1
Master’s Degree: 8.7
MBA: 4
MSW: 6.3
Law: 58.9
Medicine: 68.3
Pharmacy : 68.2
Doctoral Degree: 17.6

Student debt has jumped 70% for graduate students since 2004[7]
For an average of $41,400 debt for students[7]

Average increase in lifetime earnings by master’s type:

High School Graduates earn an average of $1.2 million in lifetime income
Bachelor’s degree holders earn $2.1 million
Master’s degree holders earn $2.5 million
Doctoral degree holders earn $3.4 million
Professional degree holders earn $4.4 million

Master’s Degrees
Social Science: <0 Liberal Arts: <0 Education: $106,388 Science: $136,873 Average: $180,010 Engineering: $362,092 Business: $375,780 Professional Degrees Average: $716,927 Law: $748,865 Medicine: $977,601 With most master’s degree holders making one of the best financial decisions

Most popular Master’s Degrees

(% of all awarded master’s degrees)
Business: 25.4%
Education: 23.6%
Health Profession: 11.1%
Public Administration: 5.5%
Engineering: 5.3%
Engineering: 5.3%
Psychology :3.6%
Social sciences, history: 2.9%
Computer science: 2.8%
Arts: 2.3%
Theology: 1.8%
Biology: 1.6%
English: 1.3%
Communication: 1.2%
Architecture: 1.1%
Law Enforcement: 1.1%

Master’s degrees aren’t yet the new entry level, but they’re more lucrative than ever.

Masters-as-new-entry-level

Citations:

  1. http://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of-not-going-to-college/
  2. http://chronicle.com/article/The-Employment-Mismatch/137625/#id=overview
  3. http://www.edvisors.com/media/files/studentaidpolicy/20140107-debt-at-graduation.pdf
  4. http://www.marketwatch.com/story/is-grad-school-to-blame-for-student-loan-crisis-2014-03-25
  5. http://www.dba-oracle.com/t_increased_earnings_income_bachelors_masters_doctorate.htm
  6. http://www.glassdoor.com/blog/7-10-employees-skills-training-degrees-glassdoor-employment-confidence-survey-q2-2014/
  7. http://www.marketwatch.com/story/is-grad-school-to-blame-for-student-loan-crisis-2014-03-25
  8. http://www.pewresearch.org/fact-tank/2014/02/28/for-millennials-a-bachelors-degree-continues-to-pay-off-but-a-masters-earns-even-more/
  9. http://billmoyers.com/2013/09/20/by-the-numbers-the-incredibly-shrinking-american-middle-class/
  10. http://nces.ed.gov/programs/digest/d13/tables/dt13_318.20.asp
  11. http://poetsandquants.com/2014/05/26/why-the-mba-is-now-the-most-popular-masters/