<p>If someone gets a BS in say Computer Science, they now have a choice to go to grad school for 1-3 years to get a Master's or go straight into the industry. Which path gives them more lifetime earnings?</p>
<p>Scenario A: Bachelor's only
1st year after graduation: $70,000
2nd year after graduation: $72,000
3rd year: $74,000
4th year: $76,000
5th year: $78,000
6th year: $80,000
7th year: $82,000
8th year: $84,000
9th year: $86,000
10th year: $88,000
Sum: $790,000</p>
<p>This is assuming that there is a constant increase each year for both paths.
By induction, the person with the bachelor's degree only will be making more.
I'm not money hungry or anything, but I would like to know what you guys think.
Do people with a master's get promoted to managers more easily than someone with just a bachelor's, thus getting 100K+ instantly?</p>
<p>You also need to account for the time value of money (look up Discounted Cash Flow analysis), but that would make the advantage for the BS more extreme.</p>
<p>I can not answer your question, but I can tell you that most people that work for a living do not at all just focus on $$. They care about what work is available, the nature of the work they can do, degree of autonomy, opportunities for growth and challenge, job security, and so on. It is way overly simplistic to boil it down to simply lifetime earnings. That usually is not the primary driver of additional degrees.</p>
<p>One variable that can skew the comparison either way is the economic and industry condition at the time of graduation.</p>
<p>Entering the labor force during good economic and industry conditions tends to lead to long term career advantages compared to doing so during bad economic and industry conditions. In the extreme case, more of those who enter during bad economic and industry conditions never get jobs in the field at all, even when conditions improve, because employers will see only a record of long term unemployment and assume that “something is wrong” with that person.</p>
<p>So entering the labor force when graduating with a bachelor’s degree or a few years later with a master’s degree can have a significant effect based on when the graduation times match up with economic and industry cycles.</p>
<p>In my experience, the advantage of the MS comes around promotion time. If you are never promoted past the “competent engineer” stage, the MS will never pay itself off - as you noted, the pay with MS is roughly equivalent to BS+2 years of experience, so you never make up those two years of essentially lost salary. HOWEVER, holding that MS makes it a lot easier to make it into management and positions of technical authority - at my company, most starting engineers lack an MS, but most senior engineers (the ones making $250k a year) have either an MS or a PhD. My department is nominally the most senior and well-paid in the company, and I am not aware of a single individual with just the BS degree. As such, I would say that the expected value of the MS exceeds that of the BS degree, even with the additional time, as the lost income of those two years is more than made up by improved promotion opportunities and corresponding salary ranges. Remember that without promotions, raises eventually drop down to cost-of-living levels - with just the BS it becomes harder and harder to see actual raises.</p>
<p>Also, many industries have specialties where an MS is expected, and in many cases these areas are also better compensated. For example, in my company the RF/microwave antenna department expects an MS (they make rare exceptions), but because good antenna engineers are so hard to find, they also pay better than other departments in the company.</p>
<p>What CosmicFish stated is what I have experienced. I go to a new employer and get the “principal” or “senior principal” position. I have the option to lead a team (if I want to) and get the money for it. Quite a few times, I am making more money than the actual leader of the team because of having the MS and prior experience.</p>
<p>Another thing that was overlooked was short-term money vs. long-term money vs. current skills. I started with a new employer and did not get much of a pay bump (I am between $175-$200K now) BUT I latched on to a cloud-computing project which pretty much allows me to learn everything about the technology. After 2 years, I will probably ask for $190-200K (since I already have a MS and PMP).</p>
<p>Note: these are cleared defense contractor jobs.</p>
<p>Basically, what others said: if you get an MS and do what you could have done with a BS, you won’t make more. The MS allows you to pursue more interesting jobs with more autonomy and perhaps somewhat higher pay, and can help make you more competitive in promotions.</p>
<p>In your scenerio you would be paying for tht MS by yourself. </p>
<p>Many people coming out of 4 yrs undergrad with a masters already (lots of AP credit etc.)</p>
<p>Or just go get your first job and spend two years in night school paid by your employer and get your MS.</p>
<p>Seems like the easiest way to move ahead in salary is to jump companies after every few years ( after your 401k is vested). Now that companies do not offer pensions there is no longer any reason to stay with one company.</p>
<p>echo 5, Ucla
ds grad in 06 into a hot market that was giving out hiring bonuses.<br>
by Ms grad time in 08, everything,and anything had dried up.</p>
<p>You do realize that your assumption is giving the BS employee higher percentage raises and you are ignoring compounding. Further, as careers progress, the BS employee will encounter barriers sooner than the MS employee that will change your analysis substantially.</p>
<p>I think the above posters are all great points. If you are looking purely from a money sense that is.</p>
<p>However I would strongly advise you making sure you are 100% committed to a Master’s for reasons other than money. Especially if you are doing a thesis/research as part of it. While 2 more years isn’t the longest time, if you are not invested in learning/working/researching pretty much on your own (Not much classes, way more research for thesis)</p>
<p>I agree with the idea that you shouldn’t pursue an MS for monetary reasons.
In fact, I just started pursuing my MS part time for insurance reasons. You know, just as a back up to stay competitive if I ever feel the need to look for a new job.</p>
<p>I think one should factor in your location and type of work you are doing when deciding to get a masters degree. Here in the Washington DC area, because of the heavy emphasis on federal government work, the M.S./M.Eng degree is more of a “check off the box” thing and less about your research/thesis. Basically employers want to know if you have a M.S. degree so they can bill you at a higher rate to the Feds.</p>
<p>As a result of that, I pretty much constructed a “non-challenging” M.S./M.Eng degree program…opting to take a few courses in areas I already had exposure to.</p>
<p>I ran your scenario with the assumption that both employees would receive annual merit raise of 3%, with the BS starting at $70K and getting a two year head start on the MS employee, who starts at $80K and receives the same 3% merit raise per year.</p>
<p>It isn’t until year 20 that the MS (18 years of work experience) finally overtakes the BS in lifetime earnings (both hit the $2.0 million mark during that year). That year, the BS is projected to make $126,500 while the MS is projected to make $136,200.</p>
<p>Of course, as others have brought up, the upward mobility for someone with an MS (or other graduate level degree) should be higher than someone with only a BS. However, I’ve seen cases where people with only a BS make it high up the ladder. It really comes down to work ethic, corporate politics, networking, performance, luck, etc.</p>
<p>Just for fun, I ran the scenario out 40 years (to simulate working from day 1 to retirement). The BS working all 40 years would earn $5.27mill over their career (end salary of $221k), while the MS working 38 years would earn $5.53mill (end salary of $239k).</p>
<p>Another scenario to consider is the cost of obtaining the Masters degree. $40-50K in student loan debt (on top of undergrad debt) sets the lifetime earnings of the Masters back a little bit.</p>
That having been said, there are still trends, and much of what you describe can be influenced by getting a masters - it generally demonstrates good work ethic, provides more networking opportunities, gives you skills that help with your job performance, etc. Like I said previously, while there certainly are a few “top” engineers with just a BS, the proportion with higher degrees goes up considerably as you look at progressively higher ranks. Also bear in mind that it is easier to sell your services with an advanced degree - many contracts require resumes of “key” people, and having an MS or PhD after your name can help get the contract for your company AND get you a promotion.</p>
<p>
Absolutely, although there are ways to avoid those costs, either by limiting yourself to funded programs or (as Global and I did) getting your company to pay for it.</p>