How much does it pay to invest in a college education? With data from the JobPricing Observatory we can outline the influence of a degree on future earnings and the time needed for the return on the initial investment.
To graduate or not to graduate? The question regarding the choice between continuing their studies or immersing themselves directly in the world of work is common to many students. The data from the JobPricing Observatory helps to take an in-depth look at the situation and is an excellent source of orientation for those who have to make this choice.
Graduating is worthwhile, but it is an investment that grows over time
If we look at the data on the salaries of graduates and non-graduates, it is clear that a university degree allows you to achieve, on average, higher salaries than those who do not have it.
The salary advantage of a graduate over a non-graduate widens over time with increasing age. In the first years of their career, between the ages of 25 and 34, a graduate earns 22.6% more than a non-graduate. But with age and experience, this figure grows significantly. From ages 35 to 44, the difference rises to 38% and after age 55, the gap rises to 79%.
The advantage of graduates is also manifested thanks to the greater probability of holding responsible roles, such as managers or executives. Positions that are often out of reach for those who decide not to graduate.
It is not worth stopping at the three-year degree
Not all degrees are the same when it comes to financial return. Those that guarantee greater advantages are the so-called STEM degrees, which concern the technological, engineering and mathematical-scientific fields, but also the level of degree obtained determines the value of the salary.
Those who achieve a master’s degree or a first-level master’s degree record an increase ranging from 40 to 42% compared to only graduates with an upper secondary education qualification. Surprisingly, there are no large gaps between those with a high school diploma and those with a bachelor’s degree. Instead, those who continue with a second level Master’s degree after the master’s degree see a further jump of 16%.
In general, continuing one’s studies and obtaining more advanced qualifications implies a progressive improvement in one’s economic condition. The only exception is between those who obtain a first level Master’s degree and those who obtain a master’s degree. In this case, those with only a first level Master’s degree tend to earn little more than a master’s degree, despite a lower qualification.
How long does it take to recover the investment of a degree?
Obtaining a degree involves a time and financial investment. Although a graduate can earn more, he will start to do so with a certain “lag” compared to a non-graduate peer who started working before him.
The question arises spontaneously: how long does it take to recover the investment in education, the lost earnings and, in other words, the delay accumulated compared to a non-graduate peer? On average, if a graduate starts working at 25, between 16 and 20 years he will have recovered the investment made.
These times may vary based on various factors, such as the place of residence during your studies (on-site or off-site) and the type of university chosen. For example, for those who graduate from universities such as the Polytechnic of Milan or Turin, known for their specialization in technical and scientific subjects, the recovery period is reduced: around 13 years are enough for those residing on site and 16 for those coming from from outside the office.