How Does Level of Education Affect Income?
Does the amount of education you’ve completed impact how much money you make during your working years? That question may be on your mind, especially if you are considering returning to school for a bachelor’s degree or an advanced degree.
The short answer to that question is yes. Study after study shows that the more education you have, the higher your salary will be.
That may not come as much of a surprise, but there’s more to the story that you may not be aware of. At Empire Resume, we want to take a deeper look into how your level of education affects income, but also how your level of education affects job security, benefits, and retirement.
How Education Translates into Dollars Earned
We often assume that having a degree will yield more income, but exactly how much more income can you expect?
The U.S. Bureau of Labor and Statistics recently published compelling data about education levels and income. This chart breaks down the data:
|Level of Education||Average Annual Earnings||Average unemployment rate|
|No high school diploma||$30,784||5.4%|
|High school diploma||$38,792||3.7%|
|Some college, but no degree||$43,316||3.3%|
The Story Behind the Numbers
Looking at this chart, it’s easy to see how your education level impacts your earning potential and job security.
Perhaps unsurprisingly, individuals without a high school diploma earn the lowest annual salary and have the greatest risk of being unemployed.
But, if someone in the “no high school diploma” category went on to obtain their high school diploma or a GED, they’d have the potential to earn close to $8,000 more per year and see their chances of unemployment drop by almost 2 points.
Also, with a high school diploma in hand, they’d be eligible to pursue a college degree if desired.
College is Key to Maximizing Salary
What may come as a bit of a surprise is that having completed some college course work is better than having no college credits at all.
With some college credits (but no college degree) under your belt, you can boost your annual salary by another $5,000 over having a high school diploma alone. You’ll also see your job security increase a bit.
Of course, if you have some college credits, then it’s in your best interest to put those credits towards complete your degree. Even if you went on to get an associate’s degree, you’d be able to bring in a bit more income than if you had no college degree at all. But the biggest jump in annual salary potential comes when you go from having a high school diploma to earning a bachelor’s degree.
If you go from having a high school diploma to having as bachelor’s degree, then you’ll see about a $26,000 increase in your annual earning potential. If you already have an associate’s degree, then getting a bachelor’s degree could potentially yield an $18,000 increase in your salary.
A Master’s Degree Matters
At some point in their careers, many professionals consider getting a master’s degree. That’s the next best move after getting a bachelor’s degree. With a master’s degree, you can increase your average annual salary by another $13,000 and be among those with the most job security.
In fact, many employers want candidates to have a master’s degree before they’ll even consider them for an interview.
Additional Benefits of Getting a Degree
Of course, a college education is about more than increasing your income potential and job security. There are several other benefits to obtaining a college degree that should be considered.
The Lumina Foundation reports that workers who have a bachelor’s degree are 47% more likely to get health insurance coverage through their employer. What’s more, their employers cover an average of 74% of the cost of health insurance. That’s a huge benefit in this country where health care and insurance is a hotly debated topic that likely won’t be resolved anytime soon.
Also, CBS News found that those who have Bachelor’s degrees are more likely to work past the typical retirement age and retire later than those with high school diplomas only. That may sound like a downside of higher education at first glance, but it’s actually a benefit.
Here’s why. Those who work past age 65 have more opportunity to save for retirement, contribute to their 401(k), and increase their eventual Social Security benefits. A few more years of work leads to a more comfortable retirement down the line.
In addition, professionals with degrees often want to work past the typical retirement age. It keeps them intellectually challenged, engaged with the world, and connected to friends and coworkers—all factors in a healthy and fulfilling life.
Those without a degree often work jobs that require manual labor. They are more likely to retire at a younger age due to health issues, injuries, or being unable to keep up with the physical demands of the job. As a result, they have less retirement in income and spend their retirement years in poorer health.
Unfortunately, all these factors come to impact life expectancy as well. Studies suggest that those who have attended at least some college can expect to live 5 to 7 years longer than their peers with no education beyond high school.
Getting a Degree Does Affect Salary—and So Much More
The bottom line is that education does have an impact on how much you can potentially earn in your lifetime. But that’s just one part of the story. More education may also lead to increased job security, better access to health care, increased security in retirement, and even a longer and more fulfilling life.
Ben St. Jacques is a Senior Copywriting Manager that is a regular contributor to Empire Resume’s blog. Ben has a strong background in corporate communications, developing newsletters, copy editing, and copywriting for a wide range of audiences.