In the growing engineering workforce, standing out from the rest is increasingly hard to do. Many engineers may consider pursuing graduate school or even a post-doctorate, but is that extra investment really worth it?
First, let’s look into the overall state of the engineering field, broken down by education level. In the charts below, you can see the growing trends of each engineering specialty, organized by bachelors, master’s, and doctoral degrees respectively.
Interpolating from this data we can see that in 2012, the most recent year on record, an estimated 73 thousand engineers graduated with a bachelor’s degree. In the same year, about 37 thousand engineers graduated with a master’s degree and an estimated 7 thousand people graduated with a doctorate in some form of engineering. These trends demonstrate exactly what we would expect, a decreasing amount of engineers graduating with advanced degrees in their respective fields, i.e. there are more engineers with bachelor’s degrees than master’s and so on.
Understanding this data lets us look into the validity of an engineer actually being “set apart” by an advanced degree, which is the common thought process. Of every engineering degree in 2012, 62% were bachelor’s degrees, 32% were master’s degrees and only 6% were doctoral degrees. The percentage of master’s degrees in engineering may shock you, but given the push of many to make master’s degrees a standard in several specialties, having a master’s degree is becoming more common. I would argue that engineers are, from a resume perspective, still “set apart” by having a master’s degree.
Now that we’ve demonstrated that having a higher level degree separates you from the majority in the engineering fields, can we notice any higher pay advantage in achieving those degrees?
According to data gathered from Good Call, having a master’s degree in engineering earns workers on average 19 thousand more dollars a year, which is nothing short of significant. While numbers on the average cost of a master in engineering in the US are highly varied, let’s say that the average cost to the student is $50 thousand. Even with this middle of the range number, engineers can start seeing a return on their initial graduate education investment in as little as 2 and a half years of working in their respective fields.
There is a clear yearly financial gain from having a master’s in engineering, but what is the return on investment over the course of an engineer’s lifetime?
The average age of a student who graduates with a master’s degree in engineering is 33, so let’s take this as the baseline age of when a worker can start earning. Given as well that the average age of retirement for an American worker is 63 years old, we can say that an engineer with a master’s degree has, on average, 30 good years of work. I would say that that number is conservative, but let’s use that for the purpose of calculating ROI. Given 30 years of work, with an initial investment of $50 thousand into higher level education, and an average increased yearly salary of $19 thousand, we can expect to see an ROI on a master’s in engineering of around 11.4, on average. Still, think that graduate degree isn’t worth it?
To prove this point even further, let’s consider the alternative choice of taking that initial $50 thousand and investing it in, say, an 8% interest mutual fund. Compounded annually for 30 years, that initial investment would yield slightly over $500 thousand. This equates to an ROI of 10.06. This means that even on the higher end of an investment return rate, you will see a better financial return on getting a master’s degree than not getting one.
This ROI only considers financial gain, without demonstrating the increased knowledge and respect that traditionally is associated with a master’s degree. It’s also important to note that a master’s degree is not necessarily needed to become a good and successful engineer, but from an average numbers perspective, the investment is definitely worth it.