Thursday, March 5, 2015

College Degree Average Return On Investment By Career Field

From BloombergBusiness, "The Career With the Biggest Financial Payoff" by Akane Otani:

Average ROI By Career Field Chart
Source: BloombergBusiness
To figure out how return on investment for a bachelor's degree varies with career choices, PayScale tracked the median salary for people in the U.S. who completed its salary survey online who had graduated between 1995 and 2014. For each career, it looked at the difference in 20-year earnings between someone who had a bachelor's degree and someone with only a high school diploma. From that differential, it then subtracted the cost of college to arrive at the ROI number.

The analysis excluded careers that require advanced degrees, like law and medicine—which explains in part why health care, otherwise a field that can pull in sky-high salaries, was middling on PayScale's list.

After computer, math, architecture, and engineering-related careers, employees working in the business and finance fields were projected to see the third-biggest ROI. They'll earn $331,345 over 20 years, according to PayScale, followed closely behind by workers in sales, marketing, and public relations, who are expected to have a net ROI of $318,212. [Emphasis added.]
In Payscale's discussion of its methodology, its computation correctly includes the extra 4 years of wages of a high school graduate compared to the 4 years of lost wages of a college graduate while attending college. The numbers exclude anyone with a postgraduate degree beyond a college degree.

Payscale's computation is consistent with others that have found a positive ROI for a college degree. Also see my May 15, 2011, blog post, "Four Year College Degree Expected Wage Premium: No Signs Of Tuition Bubble."

A positive ROI for a college degree explains parents and students' willingness to pay higher college tuition, to take on college debt and to enroll in college preparation courses.

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