Georgetown report: Why 2-year degrees can earn you more than 4-year degrees

lifetime earnings by degree

While one study after the next continues to accumulate evidence that over the course of a career workers who have college degrees can expect to earn substantially more than those who do not, every rule has exceptions.

The latest contribution comes from the Georgetown University Center on Education and the Workforce, which, like many other education-oriented research shops, highlighted the disparities in earning potential among workers with varying levels of education. Over the course of a career, workers with a bachelor's degree earn a median total of $2.3 million, 35 percent more than the $1.7 million the average worker with just an associate's degree can expect to earn in a working lifetime. That gap holds true with each incremental level of educational attainment, with master's degree-holders earning more than workers with a bachelor's, associate's degree holders earning more than workers with only a high school degree, and so on.

But in many cases, earning power is more a function of occupation than degree level. Indeed, some 28 percent of associate's degree-holders can expect to earn as much as--or more--over the course of a career than their counterparts who earned a bachelor's degree. That finding wasn't enough to derail the researchers' conclusion that "a college degree is key to economic opportunity," though they acknowledged that they didn't expect to find so many outliers.

"In a surprising number of cases, people with less educational attainment earn more than those with more education," the authors of the report, entitled "The College Payoff," wrote.

5 two-year degrees that outpace 4-year degree salaries on average

It's largely a function of occupation. Workers with just a two-year degree can out-earn graduates of four-year universities who go into less lucrative fields. Here is a sampling of five of the more profitable occupations for associate's degree-holders, with each netting a higher level of career earnings than the average worker with a bachelor's degree:

  • Computer and information systems managers: $3 million in average career earnings
  • Marketing and sales managers: $2.5 million in average career earnings
  • Computer programmers: $2.7 million in average career earnings
  • Computer software engineers: $3 million in average career earnings
  • Miscellaneous engineers, including nuclear engineers: $2.6 million

By contrast, the study highlights several occupations in which workers who have earned a bachelor's degree will typically earn far less over the course of a career, including pre-school and kindergarten teachers ($1.3 million), receptionists and information clerks ($1.2 million), and child care workers ($600,000). It is worth noting, however, that in each of those fields the average worker with only an associate's degree will net even lower earnings over the course of a career.

"On average, people with more education and higher attainment make more than people with less education," Anthony P. Carnevale, director of the Center for Education and the Workforce and the report's lead author, said in a statement. "But, major and occupation matter just as much as degree level."

4 rules for maximizing your salary potential

Carnevale and his co-authors have formulated a "rule book" to help navigate the intersection of education and potential earning power:

  • Rule No. 1: Degree level matters.
  • Rule No. 2: Occupational choice can trump degree level.
  • Rule No. 3: While occupational choice can sometimes trump education, degree level still matters most within individual occupations.
  • Rule No. 4: Race/ethnicity and gender are wild cards that matter more than education or occupation in determining earnings.

The researchers also tabulated the most popular occupations for workers with associate's degrees, as follows:

  1. Registered nurses, accounting for 9.1 percent of occupations held by associate's degree-holders, with a lifetime earnings of $2.3 million
  2. Secretaries and administrative assistants, accounting for 4.3 percent of occupations held by associate's degree-holders, with a lifetime earnings of $1.4 million
  3. Other managers, accounting for 2.6 percent of occupations held by associate's degree-holders, with a lifetime earnings of $2.3 million
  4. Supervisors/managers of retail sales workers, accounting for 2.5 percent of occupations held by associate's degree-holders, with a lifetime earnings of $1.5 million
  5. Accountants and auditors, accounting for 2 percent of occupations held by associate's degree-holders, with a lifetime earnings of $1.6 million
  6. Supervisors/managers of administrative support workers, accounting for 1.7 percent of occupations held by associate's degree-holders, with a lifetime earnings of $1.7 million
  7. Customer service representatives, accounting for 1.6 percent of occupations held by associate's degree-holders, with a lifetime earnings of $1.4 million
  8. Retail salespeople, accounting for 1.5 percent of occupations held by associate's degree-holders, with a lifetime earnings of $1.3 million
  9. Medical technologists and technicians, accounting for 1.2 percent of occupations held by associate's degree-holders, with a lifetime earnings of $2.2 million
  10. Accounting, and auditing clerks, accounting for 1.2 percent of occupations held by associate's degree-holders, with a lifetime earnings of $1.3 million

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