Gap in starting salaries between bachelor’s and master’s grads Is shrinking
Have you ever asked yourself, “What is the advantage of going for a master’s degree?” In terms of average starting salary, recent research conducted by the National Association of Colleges and Employers (NACE) has found that the advantage has been declining in recent years.
NACE’s First Destinations for the College Class of 2021 report found that there is currently a 22.5% salary differential between the degree levels, which is the lowest differential in recent years. It is a drop from 26.1% for the Class of 2020 and from 31.8% for the Class of 2017. (See Figure 1.)
During that time, the average annual salary increases for master’s degree graduates have lagged those for students earning bachelor’s degrees. For example, master’s graduates from the Class of 2021 saw their average starting salary nudge up 1.1%, while the average salary for Class of 2021 bachelor’s grads jumped 4.0%.
“There are several reasons why this is happening,” says Shawn VanDerziel, NACE executive director.
“First, it is a very competitive market, and employers are willing to pay a premium for talent, sometimes even for talent without advanced education. Employers are also increasingly screening candidates for skills and abilities, in addition to knowledge, which has opened up hiring to bachelor’s degree holders.”
There are some disciplines for which the average starting differential is still considerable. For example, the average starting salary for master’s degree graduates in both legal studies (73.5%) and communications technologies (65%) graduates exceeded the average salary at the bachelor’s degree level by more than 50%.
“There is a lot that goes into a starting salary—such as field of study, position type, industry, region of the country, and more—and we are talking about averages here,” VanDerziel says. “From an average salary perspective, a master’s degree still has a clear advantage.”
The survey that resulted in First Destinations for the College Class of 2021 is the eighth in a series that began with the college Class of 2014. Each year, the survey is conducted through individual colleges and universities nationwide, which then report their results to NACE.
The class year for 2021 graduates is defined as July 1, 2020, through June 30, 2021. The schools conducted the Class of 2021 survey from graduation through December 30, 2021, and reported their data to NACE from January through April 30, 2021. All data in the report are as of December 30, 2021.
In total, NACE received reports from 290 schools; they reported outcomes for graduating classes totaling more than 686,000 students in four degree programs—associate, bachelor’s, master’s, and doctoral-level programs. Data presented in this release are for bachelor’s degree graduates. To our knowledge, this represents the most comprehensive view of graduate outcomes currently available for the Class of 2021.
First Destinations for the College Class of 2021, featuring an executive summary of findings and interactive dashboard, is available free through the NACE website. In addition, results for previous classes can be accessed on the NACE website.
NACE recently released hiring projections for the Class of 2023 and will update the outlook for 2023 graduates in the spring. Final data regarding outcomes for the Class of 2022 will be available fall 2023. In NACE’s hiring projections for the Class of 2023, the agency’s October report revealed that employers expect new grad hiring to be up nearly 15% for the Class of 2023.
Aside: When this writer was weighing the pros and cons of pursuing a Master’s degree, I received some sage advice from my Dad, who said, “Go for the Master’s. No-one will ever be able to take it away from you.” So I did, and never regretted my decision. ~ RW
(Source: NACE)
Posted by Richard Webster Ace News Today / Follow Richard on Facebook and Twitter
