“Do what you love.” ”You should major in what speaks to you.” ”Go ahead, get that degree in Comparative Literature.” People have a lot of advice for what to study to maximize your chances of career success. Unfortunately, most of it is short-sighted or self-interested: what is your university counselor going to do, tell you that they charge $120,000 for a piece of paper which will result in a salary about equivalent to that of someone who cuts hair for a living? (Masters in Social Work.)
The team behind this site is a bunch of programmers and webmasters, so we have our own prejudices about what is worthwhile to study (Computer Science, ho!), but in the interests of being fair we used official Bureau of Labor Statistics salary data and a disinterested survey panel to keep things on the up and up. We then compared the ballpark cost of particular degree options with the net present value — essentially, the total amount of money you make over your career discounted to favor the gains you make early. This lets us calculate a Return on Investment for the various degrees.
We assume that anyone without a degree could get a job in Food Service, and use the pay data from the Bureau of Labor Statistics as a baseline. Then, we calculate the net present value (NPV) of a career in food service (essentially, the wages received over a career, discounted by 5% for each year they are in the future).
We then similarly calculate the NPV of all careers our survey panel identified as likely for the named degrees, and then take a weighted average of the best performing ones. We subtract the NPV of the career in food service from this average. This gives us the extra NPV which one earns by virtue of having the degree.
Finally, we divide the extra salary earned by the cost of the degree, resulting in a ROI. A ROI of 100%, for example, means that on the day you graduate, the present value of your boosted salary was equal to twice the cost of the degree. (If they were exactly equal, then the ROI would be 0%.)
This tends to probably overstate the ROI on degrees as a whole, but it lets us do fairly decent apples-to-apples comparisons between, e.g., a BA in English and a BA in Electrical Engineering.
Ballpark Degree Costs
- Associate’s Degree: $5,000
- Bachelor’s Degree: $110,000 (you can get it much cheaper at a public school or via financial aid)
- Master’s Degree: $160,000
- Professional Degree: $250,000
- If you want to make money, take more math courses. Degrees with rigorous mathematical backgrounds, such as engineering, accounting, and the like, routinely list at or near the top of the charts.
- Fields with a lot of money in them pay better, fields with little money in them do not. While there are many wonderful reasons to go be the assistant collections librarian at a non-for profit, Big Oil has rather substantially more to spend on salaries for the people who find the oil, which explains why geologists make so much more money than library science majors.
- Associates degrees print money. Owing to how cheap they are to get, and the virtually automatic boost in salary one gets as compared to a high school graduate, associate’s degrees give the best bang for the buck of any education. At a bare minimum, get yourself an AA. (Similar gains can be accomplished in many trade schools, but they’re largely skipped by the survey methodology we used.)