THE MASTERS DEGREE IS THE NEW BACHELOR'S DEGREE

What's the true value of a master's degree?
Mark Schneider and Jorge Klor de Alva | AEI

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The master's as the new bachelor's degree: In search of the labor market payoff

Mark Schneider and Jorge Klor de Alva
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KEY POINTS

• American universities awarded roughly 760,000 master's degrees during the 2014–15 academic year, yet we know little about the payoff associated with these degrees, especially by field of study.
  
  
• Using new data from three states, we show that field of study is closely related to postgraduation earnings from master's degrees. Master's graduates in fields such as philosophy, art, and early childhood education have the lowest median earnings—often less than graduates with bachelor's or even associate degrees.
  
  
• The highest-paid graduates earned master's degrees in fields such as business, information technology, engineering, or real estate. Differences in state labor markets also led to variance in postgraduate earnings, more so for high-paying fields than low-paying fields.
  
  
• As the number of master's degree candidates and graduates grows, federal and state governments have an obligation to collect and disseminate program-level data on earnings—prospective master's students, indeed all students, should know before they go.

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