Blog_Heading

Montana Labor Market Blog

Research & Analysis Bureau - Montana Department of Labor & Industry

Content Layout

DNNGo.xBlog

Is a Bachelor's Worth More than an Associate Degree?

Students sitting on campus lawn

In certain fields, a student's career path is relatively well-defined. An engineering major typically becomes an engineer, while a liberal arts or social sciences major might use their degree in a variety of occupations. And while engineers are required to have a bachelor's degree, many BA-holders in other fields end up taking jobs that don't require a 4-year degree. 

With the steep cost of higher education, why would anyone choose a 4-year program when a 2-year degree could get them hired? Often, students choose a major based on their interests rather than specific occupational goals, which makes it hard to tell whether a bachelor's degree is appropriate or if it's overkill. However, our research into workforce outcomes can tell us which programs result in a higher wage premium for bachelor's degree graduates.

What is a wage premium?

In this context, a wage premium is the difference in earnings between a bachelor's degree holder and an associate degree holder within the same field of study. The table below displays the five programs of study in Montana colleges that have the highest wage premiums, as well those with the lowest premiums.

Programs with the Largest and Smallest Wage Premiums for Bachelor’s Degree Attainment

Program

Associate Degree

Bachelor's Degree

Wage Premium

 

1-Year

5-Year

1-Year

5-Year

1-Year

5-Year

Largest Premiums

Information Technology

$21,480

$33,559

$51,136

$69,928

$29,656

$36,370

Construction Engineering

$21,199

$31,752

 $30,738

$55,719

$9,539

$23,968

Health Information Tech. and Medical Coding*

$21,533

$25,559

$27,543

$44,773

$6,010

$19,215

Secondary Education

$13,820

$19,411

 $21,430

$32,772

$7,609

$13,361

Early Childhood Education

$18,584

$21,350

 $25,731

$34,098

$7,147

$12,749

Smallest Premiums

Transport/Material Moving

$20,455

$32,332

$16,661

 $34,867

-$3,793

$2,535

Health Tech/ Assistant

$34,173

$43,452

$22,089

$46,087

-$12,084

$2,636

Visual and Performing Arts

$15,664

$21,991

$13,994

$22,855

-$1,670

$864

Registered Nursing

$41,526

$49,556

$41,110

$51,016

-$442

$1,460

Engineering Tech, Other

$29,196

$50,629

$32,497

$49,221

$3,300

-$1,408

Public Safety

$23,553

$42,193

$23,288

$35,871

-$265

-$6,323

Allied Health Diagnostic, Intervention, Treatment

$32,984

$45,678

$16,418

$30,467

-$16,567

-$15,210

Source: MTDLI, OCHE, RMC, and CC graduate data wage match. Average wages reported in 2015 dollars using the CPI-U.
* = Associate Degree column represents wage outcomes for Certificate of Applied Science because it is more common. 
Graduates are categorized by program based on the highest degree they earned from MT colleges.

 

Generally, programs that train graduates to work in occupations that require a bachelor’s degree have larger wage premiums than those that do not. Graduates in education, health information technology, construction engineering, and information technology received the largest wage premium for bachelor’s degree attainment. 

Bachelor’s degree graduates from these programs, along with business, accounting, and automotive technology graduates, report over $10,000 more in wages five years after graduation than those holding an associate degree in these fields. The workforce outcomes for graduates from these programs suggest Montana employers see value in obtaining a bachelor’s degree. 

On the other hand, graduates in allied health, public safety, engineering technology, health technicians and assistants, and transportation and material moving programs have the smallest wage premium for bachelor’s degree attainment. Many of the jobs graduates from these programs pursue don’t require a bachelor’s degree, and students could lower their education costs by pursuing an associate degree instead.

It is important to note that the study tracked student outcomes one and five years after graduation, so the results represent fairly short-term outcomes, and it is possible that the wage premiums could increase for some programs given a longer timeframe. For example, registered nursing graduates experience minimal wage premiums for a bachelor’s degree. Employers appear to hire both associate and bachelor’s degree RNs at a similar pay. However, bachelor’s trained RNs do experience slightly faster wage growth over time, suggesting a greater earning potential.

Ultimately, an individual's aptitudes and interests should determine their career choices, but a little planning and some good labor market information can ensure they take the smartest path to get there.

Want to know more?

This post is an excerpt from this month's featured article "Does Your College Major Matter in the Workforce?" by Senior Economist, Amy Watson. The article goes into greater detail about the many factors that determine workforce outcomes for college graduates.

The article itself is based on a recent study by the Montana Department of Labor & Industry entitled "Meeting State Worker Demand: A Report on the Labor Market Outcomes for Montana Colleges."

Categories: Montana Labor Market Blog, Ask an Economist, Montana Career Lab

DNNGO.xBlog.Search

Search Blog Post

DNNGO.xBlog.DashBoard

Popular Post

avt.Action Form

DNNGO.xBlog.DashBoard

Find Post by Category

DNNGO.xBlog.DashBoard

Find Post by Tags

DNNGO.xBlog.DashBoard

Archived Posts