Pay Differences Across Degrees and other Characteristics

4-Year vs. 2-Year College Degrees: How Does the Pay Compare?

Summary:Understand the payscale salary database and learn how four-year and two-year college degree payscale compare.

4-Year vs. 2-Year College Degrees: How Does the Pay Compare?

Summary:Understand the payscale salary database and learn how four-year and two-year college degree payscale compare.
Pay Differences Across Degrees and other Characteristics

Table of Contents

With the rising cost of four-year colleges, people may ask themselves whether the salary promised by a bachelor’s degree is really worth the time and money required to complete the program. Why not complete an associate’s degree program, and enter the workforce sooner and (mostly) free of debt?

Using the extensive PayScale salary database, in this post we will examine the pay differences across degrees and other characteristics. While our database has its limitations – for example, we don’t track unemployment rates, which are much higher for less advanced degrees – it gives us insight into the value in salary of finishing four years at a college or university.

4-Year vs. 2-Year College Degrees: How Does the Pay Compare?

Will a bachelor’s degree lead to higher pay in your career? Use the PayScale salary survey to find out.

Salary by Degree for Starting Workers

We first look at pay for starting workers, which are workers with less than five years of experience. The typical starting worker in the included data set has two years of experience. Regardless of whether we are looking at the bottom earners (10th percentile), the top earners (90th percentile), or the typical earners (50th percentile/median), the bachelor’s degree worker earns at least 20% more than the associate’s degree worker in our sample:

Pay by Degree for Experienced Workers

Next we looked at the pay for experienced workers, which we defined as employees with at least 10 years of experience. The typical experienced worker in the included data set has 15 years of experience. Similar to starting workers, experienced bachelor’s degree workers make more than experienced associate’s degree workers at every level. In fact, the increase in bachelor’s pay over associate’s pay (Bachelor’s Premium) increases with each pay percentile.

It is possible for an employee with an associate’s degree to earn the same or more than one with a bachelor’s degree, but it is not the most common case. One would hedge one’s bets of higher earnings by getting a bachelor’s degree or more. For example, when looking at experienced workers, you need to be in the top 20 percent of earners with associate’s degrees to earn the same or more than the typical bachelor’s degree worker.

Pay by Degree for a Set of Jobs

Looking at national pay by degree shows that a bachelor’s degree is generally a win in terms of earnings, regardless of the experience and pay percentile of the worker.

What if we look at pay for specific jobs where a worker can hold either a bachelor’s or associate’s degree? Does a bachelor’s degree always offer a large increase in pay over an associate’s degree? The answer is no. For certain jobs, you obtain the necessary knowledge in an associate’s degree program and thus gain little job-specific knowledge by instead taking a bachelor’s degree program (e.g. Nurse, Dental Hygienist, Chef, etc.)

The following table lists jobs where holding a bachelor’s degree increases a worker’s median pay by no more than 10% above associate’s degree workers:

In other jobs, it does truly pay to hold a bachelor’s degree, although one is not required in the job. In these jobs, which are mostly managerial and professional jobs, bachelor’s degree workers earn a median pay 15 percent or more above associate’s degree workers.

Do the Extra Two Years Pay Off?

In general, getting a bachelor’s degree is a win in terms of pay over an associate’s degree. In our sample, the national starting median pay for those who hold only a bachelor’s degree is $43,200, which is over 20 percent higher than the national starting median pay for those who hold an associate’s degree ($35,100).

However, those extra two years are expensive. Assuming you don’t work at the median associate’s degree pay of $35,100 for two years, and pay ~$8,000 a year for tuition and fees, that is a $88,200 in foregone income and expenses.

With the $8,100 (starting) to $22,900 (experienced) median per year premium for a bachelor’s, it will take less than 10 years to earn back the missing earning years and tuition cost. Everything after that is gravy.

Of course, most people would also count two years of college as a lot more fun than 2 years of full-time work 🙂

Getting a bachelor’s degree doesn’t just come with a higher chance of good pay. It also improves your chance of staying employed. According to the Bureau of Labor Statistics, the unemployment rates for workers with more education is lower than for those with two years or less of post-secondary education.

In conclusion, when looking at typical pay the employee with a bachelor’s degree will always earn more than one with an associate’s degree. Although top earning associate degree workers can earn the same or more as the typical bachelor’s degree holder, the key word here is “can.” The above data shows that it is not the common case.

For people trying to find a way to earn high pay, a bachelor’s degree will likely help them.

Are you curious about the pay you could receive with your bachelor’s degree? When you want powerful salary data and comparisons customized for your exact position or job offer, be sure to build a complete profile by taking PayScale’s full salary survey.

by Katie Bardaro
Research Analyst, PayScale, Inc.

Quick thought: Hmm… For what its worth, you might want to consider online degrees as well.  Anybody know of any data on online bachelors degrees and how they stack up among the payscale? Leave me a comment if you do. – Jim

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One Comment

  1. but did you consider that people entering the dgree course are in general a lot smarter than those in diploma programs

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