Making graduate degrees pay: salary benefits for Masters and PhD candidates

For many, the main motivation for applying to grad school is to ensure career progression. But research indicates that Masters degrees and PhD programs have a direct impact on how much you will earn after graduation. Put simply, going to graduate school is good for the wallet.

You may have many reasons for considering a Masters degree or PhD program degree but evidence gathered from employers around the world suggests that candidates with graduate degrees earn more money than their colleagues without such qualifications.  Varied employment sectors, from consulting to engineering and technology, report positively on rising numbers of students from graduate schools and graduate programs seeking positions in their organizations and many encourage more candidates of this kind to apply for their career opportunities.

A recently published survey from QS illustrates the financial benefits available to those holding either a Masters or a PhD degree and underlines the increasing gap between those candidates entering employment with or without an advanced degree.  The QS International Recruiter Survey 2007, an annual survey involving 498 international employers in North America and Asia, illustrates that the difference between an employee with a first degree and a graduate qualification can be as much as 71%.

	1st degree	4 yrs Exp	Masters	PhD
		(No Mastesr)
Aerospace/Defense	$48,076	$62,500	$70,000	$87,500
Consulting/Prof. Services	$59,535	$72,129	$65,121	$77,415
Energy	$42,032	$64,351	$65,074	$70,761
Financial Services/Banking	$56,837	$66,231	$62,937	$73,002
FMCG	$39,767	$66,528	$45,286	$52,710
Manufact./Automotive	$35,417	$64,447	$60,716	$70,466
Media/Entertainment	$43,250	$53,637	$46,927	$63,745
Pharma./Healthcare	$41,942	$68,182	$71,287	$72,346
Public Sector/Non-profit	$37,569	$66,478	$60,478	$73,188
Retail	$39,767	$56,326	$53,541	$72,388
Telecoms/High Tech.	$48,647	$57,500	$72,500	$75,000
Transportation	$37,592	$50,805	$50,967	$53,933

Nunzio Quacquarelli, CEO of QS and author of the report sees the preference for rewarding those with advanced degrees as something that has developed over a clear period of time: “During the last five years or so there has been a fundamental shift in attitude on the part of recruiters to encourage candidates with more qualifications to apply for positions in their companies.  Global employers now use graduate degrees as key points of differentiation between candidates seeking employment, and the QS International Recruiter Survey indicates that 95% of international employers seek to actively recruit employees with a graduate qualification.”

The premium paid to those entering the world of work with a Masters degree is significant over those employees with a basic undergraduate qualification.  In some specialized areas where technical skills are particularly significant, the benefit of a Masters degree can also outweigh that of up to four years work experience: in the aerospace, defense and high-tech sectors, the premium is as much as 31%.  In financial terms, the average reported salaries in all sectors are greater for those with a Masters or PhD degree compared with those candidates with only an undergraduate qualification, with the pharmaceutical and healthcare professions rewarding their Masters employees better than any other sector.

The position of PhD graduates in the national and international labour market is different from those with other graduate qualifications.  For many years the value of a research degree has been recognized by academic and research organizations alike, but the increasing competition of our current knowledge-based economy has seen companies become more active in their recruitment of PhD graduates. Such candidates are viewed as highly motivated, research-driven, creative and original and bring with them a whole host of skills that benefit any form of business or industry.  Dave Alker from Pfizer Global Research and Development, the research wing of the international pharmaceutical giant Pfizer, sees the value of recruiting candidates with a research background very clearly indeed: “To remain a world leader in drug discovery, Pfizer needs people who have sound scientific judgement and enjoy the challenge of solving complex problems without having a clear idea what the solution might turn out to be.  Although we recruit people without doctorates, and a PhD isn't the only route to developing these skills, it may be the most stimulating and enjoyable way of doing that for some people."

With the interest in PhD graduates increasing, what does this mean for salaries for employees with such qualifications?  The QS International Recruiter Survey 2007 demonstrates that investing between three and five years of study into a graduate research program does pay financial dividends for those holding such qualifications.  The research paints an even more positive picture for those seeking employment in Europe and North America; across all employment sectors surveyed, a premium is paid to those candidates with a PhD qualification - ranging from between 2% and 93% depending on the sector.

Although the investment for many students is high in terms of both tuition fees and opportunity costs, the return is clear – a graduate degree really does pay dividends.  With the greater involvement of Government-level agencies in encouraging more participation in graduate education, the likelihood is that candidates with the best qualifications will be rewarded with the best employment opportunities and higher salaries.  As Quacquarelli observes: “This is the right time to take a Masters degree.  Graduating from the best programs will pay dividends in every way.”

Link to Read: http://graduateschool.topuniversities.com/articles/salary/making-graduate-degrees-pay-salary-benefits-masters-and-phd-candidates