Education pays ...

http://www.bls.gov/emp/ep_chart_001.htm

by robg • 15 years ago

76 50 15 years ago

lukeholder• 15 years ago

yes, having education might mean you can get the job that pays more but this does take into account the unemployed into the median.

antimora• 15 years ago

I hope this data is normalized and other contributing factors such age are removed. It is better to see a regration model than pure stat graphs.

gjm11• 15 years ago

Education pays. Or being clever gets you more education, and also pays. Or being willing to work hard does those things. Or coming from a family with more money, or with a particular kind of attitude (curiosity? go-getting? ...), does those things. Or there's a lot of prejudice out there (on the basis of sex, skin colour, or whatever) that affects both how a person's education goes and how their later career does. Or any combination of those. Or any number of other possibilities.

All together, now: Correlation is not the same thing as causation.

danteembermage• 15 years ago

I'd love to see Wages = b0 + b1 * Bachelor's degree dummy + b2 * parents income + b3 * IQ + b4 * [thing I can't say] + b5 * [other thing I can't say] + b5 * work ethic measure (HS GPA?) + e There are a million things wrong with doing it this way but it would be an interesting addition to looking at that graph by itself. I half-heartedly tried to Google a decent paper but didn't have much luck with anything newer than the 70's

daniel-cussen• 15 years ago

I propose a businessman whose output cannot be measured very well earns p/r+log(e)+k, where p is the profit the company makes, r is his rank within the company (CEO is 1, CFO/CMO is 2, etc), e is the number of employees beneath him, and k is the base salary at that firm.

The idea here is that upper management at certain companies effectively own the firm and distribute profit accordingly, while middle management usually advances in income by increasing empire.

Edit: variable name.

msellout• 15 years ago

Measuring the effect of education is one of the most difficult econometrics tasks due to the way that most societies pursue education -- one year at a time until you're done with it. There's not enough variation.... I was about to launch into a detailed technical explanation, but I think I'll just leave it at the intuitive one.

feralchimp• 15 years ago

It's much worse than that. The linked article is about the 'median wage' at each of those education levels. I can't imagine a metric less interesting to HN than 'median performance.'

Show me the top 10% of earners, then give me the breakdown of how much traditional education those people consumed. Hustlers aren't getting by on their credentials.

dredmorbius3• 15 years ago

What's wrong with using median in this instance?

Other than knocking off a few obvious outliers: Mssrs. Gates, Jobs, Ellison, and Zuckerberg, I believe.

_delirium• 15 years ago

I'd be surprised if those numbers weren't even more skewed--- high-profile entrepreneurs like Bill Gates are surely outnumbered by the vast hordes of MBAs, engineers, etc. Recall that 10% of the American working population is around 13 million people! And the cutoff is around $100k in income. A large portion are white-collar office workers at the upper-end of their companies' pay scales, or not even that upper end for technology firms, and people with no degrees aren't commonly found there (take a look at the top 500 employees at Boeing, Exxon, or Goldman Sachs, for example).

crasshopper• 15 years ago

Show me the bottom 10% of earners between ages 25-35. I want to gauge expected tail risk before I pay O($100k) for a degree.

nobody3141592653• 15 years ago

That is current averages ie. historical data.

What it says is that somebody who got a medical/law degree 20-30 years ago, did very well over the last 20-30 years.

It says nothing about whether somebody leaving school today will do better in 20-30 years having spent 10x as much as their parents generation on college - rather than becoming a plumber or electrician or founding a startup

nobody3141592653• 15 years ago

And it's even worse than that - 20/30 years ago most of those none law/medicine degrees would have got somebody a VP type job. Now a non-professional degree gets you an entry level secretary job.

If you compare the lifetime earnings of a rare graduate 30years ago with those of a new 'social studies' type grad today it will be a lot worse

epicureanideal• 15 years ago

Looks like the benefits of a bachelors are shrinking

meterplech• 15 years ago

This topic reaches the frontpage on HN at least once a week. Can we avoid rehashing the same arguments? Maybe just vote these up when something original comes up.

ivankirigin• 15 years ago

It is irresponsible to show these graphs that average different degrees together. The top 5 majors earn 2X the bottom 5:

http://www.payscale.com/best-colleges/degrees.asp

suivix2• 15 years ago

Perhaps it's too much data for just a few graphs but it would also be interesting to see race, gender, and so on.

cmagahern• 15 years ago

Interesting that doctoral degrees do not pay more on average than professional ones! Perhaps it is because most PhD's enter the field of research as opposed to industry? I haven't met that many PhD's in industry but there are a few.

nobody3141592653• 15 years ago

My undergrad university sends me begging letters - the place I did my Phd doesn't. They don't consider it worth the postage cost given what Phds earn!

alttag• 15 years ago

It doesn't say "PhDs", it says "Doctoral degrees", which may mean (it isn't clear), that EdD (Doctor of Education, a common degree for public school administrators), DBA (Doctor of Business Administration, usually from Harvard), EDB (Executive Doctor of Business, typically offered to already successful business people) and other similar specialized but not necessarily "professional" degrees (which I interpret to mean MD, JD, DDS, chiropractic, etc.) would be in this group.

mhartl2• 15 years ago

All such studies suffer from the same debilitating flaw—there are almost certainly confounding variables at work. To reach any firm conclusion, you would need to compare degree recipients with a cohort of statistically equivalent people who could have earned degree X but did something else instead. All these "education pays" charts show is that people who earn advanced degrees earn more money. But such people are also probably smarter and more determined than average. You don't need a Ph.D. to know that correlation doesn't imply causation.

P.S. This is not sour grapes. I have degrees in physics from Harvard (A.B.) and Caltech (M.S., Ph.D.), and I make well more than the median earnings for Ph.D.s.

P.P.S. I know the real reason these sorts of studies proliferate, but this comment is too small to contain it.

ObjectiveSub• 15 years ago

I am interested to know your opinion on why these studies proliferate. Can you please explain why?

gcb2• 15 years ago

people need data to validate their preconceptions

fdschoeneman• 15 years ago

Stories like this pop up frequently on HN. But I'm intrigued by your post post script. What do you think is the reason for the proliferation of these studies, and why do they so often ignore the correlation-does-not-prove-causation fallacy?

In this case, I see two possibilities. The Bureau of Labor Statistics author is too dumb to understand the fallacy. The second is that she does understand the fallacy, but thinks that at least some Americans won't. If the latter, what purpose would that serve?

Interesting.

roel_v2• 15 years ago

I think it's because not because these numbers are imperfect, or because many things can be read into them that shouldn't, that they are completely useless. In the end you need some data that is intuitive to understand, even if there are many ifs and buts involved.

mhartl2• 15 years ago

I'll tell you my hypothesis some time, off the record and over a nice bottle of Pinot.

Maven911• 15 years ago

Does either an engineering degree or mba or CS degree count as a professional degree for BLS ?

yardie2• 15 years ago

I believe a professional degree is MD, DDS, etc.

A BSN is an undergraduate professional degree so I'm not sure where it falls in that list.

Edit: Engineering and accounting are professional degress, computer science is not.

arethuza2• 15 years ago

So they are "professional" because the are part of the standard career track that eventually leads to someone getting a formal "professional" qualification? That would suggest that an MBA is not a professional degree, although it is a vocational degree, because MBA graduates don't typically go on to become formally professionally qualified (e.g. unlike lawyers, medical doctors, etc.).

[NB I'm in the UK and while I know plenty lawyers/chartered engineers etc. I've never heard anyone talk about a "professional degree"].

naughtysriram2• 15 years ago

Education Pays.. right.. Who will pay for education??

rooshdi2• 15 years ago

...the educated?

naughtysriram2• 15 years ago

Or to call them the paid / rich?

suivix2• 15 years ago

Has anyone considered that maybe the types of people who become educated are also more motivated?

People who floss their teeth have a 7 year higher life expectancy. Obviously, flossing your teeth doesn't increase it.

georgemcbay• 15 years ago

I agree with your primary point, but your follow-up example isn't the greatest... Flossing your teeth can have a real impact on health -- gum disease (which flossing is an excellent preventative agent against) can cause all sorts of serious health problems like increased risk of heart attack and stroke. People with periodontal disease have a 2x greater chance of coronary artery disease than people without periodontal disease. That's a pretty big deal.

roel_v2• 15 years ago

The first point (gum disease can cause health problems) is most likely true, even if just intuitively, but they would have to be pretty serious to reduce life expectancy by 7 years - even smoking reduces it by 'only' 14 years, and I'd be hard pressed to believe that not flossing is half as dangerous as smoking.

The second argument is a classical cause/effect thing. I can't imagine that tooth diseases increase heart diseases by 100%, but I can very easily imagine that people with certain habits (eating lots of cheap unhealthy food with much fat and sugar) suffer from both.

Then again I don't know anything about this field, if there is any research that confirms your arguments I'd be surprised but interested.

justin_vanw• 15 years ago

So, does education make you better at your job? My experience says that there is very little correlation between having a MS vs a BS vs no degree in the quality of work people get done, at least as a professional coder. In fact, to me, a Masters is a red flag, it causes me to give a person additional scrutiny, because of the huge glut of awful coders with Masters that I have run into.

So, in my experience, having a more advanced degree could only lead to higher income because of big companies with big HR departments, the government, and other clueless employers giving a pay differential.

I would love to see the numbers comparing someone with a PHD from Shit State, compared to a person with a BS from Princeton, compared to a person with a genius level IQ who dropped out of Berkley. Or a PHD in History vs a BS in Math.

I'm always suspicious of PHD's in industry. You don't get a PHD to go work for GE, you go work for GE when you have a piece of paper with PHD on it but can't get an academic position.

So, what I'm saying is, while education level may be correlated with income, it's not a cause, except where employers are clueless.

_dps• 15 years ago

I occasionally run into this "I'm suspicious of Ph.D.s in industry" phenomenon and frankly it's baffling. (disclosure: I am obviously biased by having a Ph.D. and no longer being an academic)

Ph.Ds. in industry create lots of amazing things: UNIX, 747s, airbags, wireless protocols, manufacturing robots, search engines, and logistics optimization systems are just a few that almost everyone depends on every single day (indirectly in some cases). These are not systems that can be designed without a large amount of focused domain knowledge, which is precisely what the Ph.D. entails.

Sure, there are some people with Ph.D.s who are impractical and unsuited for front-line "get things done" work. I can assure you that is an intrinsic personality trait and not something created by intensely focused study on interesting ideas, which is the defining characteristic of the doctorate.

blackhole• 15 years ago

There is a big, big, big problem when comparing degrees: People with PhD's are older and therefore have more experience. Everything in this entire chart could theoretically be attributed entirely to experience and not education. Of course, it could also all be education, but as they say, Correlation does not imply Causation.

dereg• 15 years ago

This is a specious argument by the bls. The question isn't whether education pays or not; the real question is whether or not education increases a person's productivity.

I'd argue not. It all depends on the degree. College is a form of job training for people like engineers, in which case it has a high return on investment. However, many [if not most] degrees have no relevance to their college degrees.

As many as 63% of college graduates occupy jobs that don't require a college degree! (Uncited, lazy, sorry.)

So does college "pay"? Sure. Does it increase one's skills and productivity? Factoring the opportunity costs, it's hard to tell. I'm in the camp of people who argue that the returns to higher education are due to what's called a "sheepskin", or "signalling", effect in economics.

tryitnow• 15 years ago

I still get a kick out of people who talk about how education pays but don't the whole correlation/causation thing. Apparently, education for them does not include basic stats.

Education pays ...

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