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BS vs. MS - Lifetime earnings

skbryanskbryan Registered User Posts: 251 Junior Member
edited February 2012 in Engineering Majors
If someone gets a BS in say Computer Science, they now have a choice to go to grad school for 1-3 years to get a Master's or go straight into the industry. Which path gives them more lifetime earnings?

Scenario A: Bachelor's only
1st year after graduation: $70,000
2nd year after graduation: $72,000
3rd year: $74,000
4th year: $76,000
5th year: $78,000
6th year: $80,000
7th year: $82,000
8th year: $84,000
9th year: $86,000
10th year: $88,000
Sum: $790,000

Scenario B: Master's + Bachelor's
1st year after graduation: $0
2nd year after graduation: $0
3rd year: $80,000
4th year: $82,000
5th year: $84,000
6th year: $86,000
7th year: $88,000
8th year: $90,000
9th year: $92,000
10th year: $94,000
Sum: $696,000

This is assuming that there is a constant increase each year for both paths.
By induction, the person with the bachelor's degree only will be making more.
I'm not money hungry or anything, but I would like to know what you guys think.
Do people with a master's get promoted to managers more easily than someone with just a bachelor's, thus getting 100K+ instantly?
Post edited by skbryan on

Replies to: BS vs. MS - Lifetime earnings

  • al6200al6200 Registered User Posts: 1,579 Senior Member
    You also need to account for the time value of money (look up Discounted Cash Flow analysis), but that would make the advantage for the BS more extreme.
  • starbrightstarbright Registered User Posts: 4,660 Senior Member
    I can not answer your question, but I can tell you that most people that work for a living do not at all just focus on $$. They care about what work is available, the nature of the work they can do, degree of autonomy, opportunities for growth and challenge, job security, and so on. It is way overly simplistic to boil it down to simply lifetime earnings. That usually is not the primary driver of additional degrees.
  • JamesMadisonJamesMadison - Posts: 619 Member
    I totally agree with starbright. You should not be thinking about lifetime earnings when making that decision. At all!
  • ucbalumnusucbalumnus Registered User Posts: 62,831 Senior Member
    One variable that can skew the comparison either way is the economic and industry condition at the time of graduation.

    Entering the labor force during good economic and industry conditions tends to lead to long term career advantages compared to doing so during bad economic and industry conditions. In the extreme case, more of those who enter during bad economic and industry conditions never get jobs in the field at all, even when conditions improve, because employers will see only a record of long term unemployment and assume that "something is wrong" with that person.

    So entering the labor force when graduating with a bachelor's degree or a few years later with a master's degree can have a significant effect based on when the graduation times match up with economic and industry cycles.
  • cosmicfishcosmicfish Registered User Posts: 4,203 Senior Member
    In my experience, the advantage of the MS comes around promotion time. If you are never promoted past the "competent engineer" stage, the MS will never pay itself off - as you noted, the pay with MS is roughly equivalent to BS+2 years of experience, so you never make up those two years of essentially lost salary. HOWEVER, holding that MS makes it a lot easier to make it into management and positions of technical authority - at my company, most starting engineers lack an MS, but most senior engineers (the ones making $250k a year) have either an MS or a PhD. My department is nominally the most senior and well-paid in the company, and I am not aware of a single individual with just the BS degree. As such, I would say that the expected value of the MS exceeds that of the BS degree, even with the additional time, as the lost income of those two years is more than made up by improved promotion opportunities and corresponding salary ranges. Remember that without promotions, raises eventually drop down to cost-of-living levels - with just the BS it becomes harder and harder to see actual raises.

    Also, many industries have specialties where an MS is expected, and in many cases these areas are also better compensated. For example, in my company the RF/microwave antenna department expects an MS (they make rare exceptions), but because good antenna engineers are so hard to find, they also pay better than other departments in the company.
  • GLOBALTRAVELERGLOBALTRAVELER Registered User Posts: 2,886 Senior Member
    What CosmicFish stated is what I have experienced. I go to a new employer and get the "principal" or "senior principal" position. I have the option to lead a team (if I want to) and get the money for it. Quite a few times, I am making more money than the actual leader of the team because of having the MS and prior experience.

    Another thing that was overlooked was short-term money vs. long-term money vs. current skills. I started with a new employer and did not get much of a pay bump (I am between $175-$200K now) BUT I latched on to a cloud-computing project which pretty much allows me to learn everything about the technology. After 2 years, I will probably ask for $190-200K (since I already have a MS and PMP).

    Note: these are cleared defense contractor jobs.
  • aegrisomniaaegrisomnia Registered User Posts: 1,026 Senior Member
    Basically, what others said: if you get an MS and do what you could have done with a BS, you won't make more. The MS allows you to pursue more interesting jobs with more autonomy and perhaps somewhat higher pay, and can help make you more competitive in promotions.
  • saxsax Registered User Posts: 5,428 Senior Member
    In your scenerio you would be paying for tht MS by yourself.

    Many people coming out of 4 yrs undergrad with a masters already (lots of AP credit etc.)

    Or just go get your first job and spend two years in night school paid by your employer and get your MS.

    Seems like the easiest way to move ahead in salary is to jump companies after every few years ( after your 401k is vested). Now that companies do not offer pensions there is no longer any reason to stay with one company.
  • GLOBALTRAVELERGLOBALTRAVELER Registered User Posts: 2,886 Senior Member
    Seems like the easiest way to move ahead in salary is to jump companies after every few years ( after your 401k is vested). Now that companies do not offer pensions there is no longer any reason to stay with one company.

  • LongPrimeLongPrime - Posts: 5,208 Senior Member
    echo Starbright,3
    ds did Cs masters not for future earnings but Bc he could on scholarship.
  • LongPrimeLongPrime - Posts: 5,208 Senior Member
    echo 5, Ucla
    ds grad in 06 into a hot market that was giving out hiring bonuses.
    by Ms grad time in 08, everything,and anything had dried up.
  • LongPrimeLongPrime - Posts: 5,208 Senior Member
    echo 6, cosmicfish
    ms Could mean technical expertise and better chance of paygrade/promotion. COULD,
  • rogracerrogracer Registered User Posts: 1,205 Senior Member
    You do realize that your assumption is giving the BS employee higher percentage raises and you are ignoring compounding. Further, as careers progress, the BS employee will encounter barriers sooner than the MS employee that will change your analysis substantially.
  • SharpieMarkerSharpieMarker Registered User Posts: 31 Junior Member
    I think the above posters are all great points. If you are looking purely from a money sense that is.

    However I would strongly advise you making sure you are 100% committed to a Master's for reasons other than money. Especially if you are doing a thesis/research as part of it. While 2 more years isn't the longest time, if you are not invested in learning/working/researching pretty much on your own (Not much classes, way more research for thesis)
  • FatoonsFatoons Registered User Posts: 21 New Member
    I agree with the idea that you shouldn't pursue an MS for monetary reasons.
    In fact, I just started pursuing my MS part time for insurance reasons. You know, just as a back up to stay competitive if I ever feel the need to look for a new job.
This discussion has been closed.