University Grads Make More Money Over Time
According to a recent study from the University of Ottawa, the cost of higher education is still worth it. University degrees are linked to higher salaries almost regardless of the subject. 🙂
The study published this week looked at income data for 620,000 graduates of 14 different universities and colleges between 2005 and 2013, spanning an 8 year period to gauge progress over time.
On average, graduates from universities in 2005 made $45,200 in inflation-adjusted income in their first year after school. This number increased every year after that, growing by a total of 66% to $74,900 in 2013, which covers an 8 year period. But college graduates started off somewhat lower. The average income for a new college grad was $33,900 in 2005. After 8 years it has grown by 59% to reach $54,000. These numbers only represent the average. Individual results of a college or university education can be very different from one person to another.
A closer look at the study’s findings reveal a big difference by gender. Both men and women start off making about the same after graduating university. But 8 years later, those averages diverge. The typical male university graduate who started working in 2005 was making 91% more money by 2013. His female counterpart who graduated with him saw her income only increase by 42% from 2005 to 2013.
I think there are a couple of main reasons for the gender discrepancy in income growth.
- Men and women tend to choose different majors. STEM fields, particularly technology and engineering, are pursued more by men than women. These fields also consistently offer lucrative career paths.
- Many women tend to take time out of the workforce to raise children. This is due to a fact of nature. Nearly every research has shown breastfeeding increases a baby’s intelligence. Men can’t give birth or breastfeed.
Higher Education in Universities
As with any report we have to consider any hidden agendas. A university study that concludes going to university is a good decision is like a real estate agent advocating for home ownership. It doesn’t mean they’re wrong, but we should be aware of the bias. 😉 We can also keep in mind that university graduates have been pre-screened to have certain qualities like being smart or ambitious enough to attain high grades in high school. These personality traits often lead to higher earnings regardless of attending university; correlation ≠ causation.
Higher education isn’t for everyone. Some folks excel at formal education, while others do better with a trade or entrepreneurship. The important thing to remember is that learning is a lifelong process and we can pursue it in many different ways. 🙂
Random Useless Fact: