Montana Labor Market Blog

Research & Analysis Bureau - Montana Department of Labor & Industry

Content Layout


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


Associate Degree

Bachelor's Degree

Wage Premium








Largest Premiums

Information Technology







Construction Engineering







Health Information Tech. and Medical Coding*







Secondary Education







Early Childhood Education







Smallest Premiums

Transport/Material Moving







Health Tech/ Assistant







Visual and Performing Arts







Registered Nursing







Engineering Tech, Other







Public Safety







Allied Health Diagnostic, Intervention, Treatment







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


Search Blog Post


Popular Post

avt.Action Form


Find Post by Category


Find Post by Tags


Archived Posts