Master’s Degree vs. Bachelor’s: Is the Pay Gap Worth It?

Imagine two college graduates who studied the same thing. One with a bachelor’s degree immediately goes to work and gains experience, while the other decides to invest tens of thousands of dollars and spend two years on a master’s degree with the certainty that it will bring a higher salary in the future. But if you fast forward five years, whose choice will be right?

For a long time, it was believed that the higher the education, the higher the earnings. But today, the numbers suggest otherwise. In 2017, graduates with a master’s degree earned 31.8% more than those with only a bachelor’s degree. By 2021, this gap has narrowed to 22.5%; this difference is almost negligible in some industries. On top of that, a master’s degree doesn’t come cheap—about $44,000 to $71,000 in tuition fees alone. And if you take into account the lost income, student debts and the time that could have gone to work, the cost turns out to be even higher.

But if a master’s degree is mandatory for some fields, then for others, skills and experience are much more important skills. Therefore, before spending years and tens of thousands of dollars, it’s worth considering: will a master’s degree pay off in the form of a high salary? Or may real-world experience, certificates, and skill development give the same (or even better) financial results without debt? There is no definite answer — it all depends on your chosen career. For some, a master’s degree will be a profitable investment, while for others, it will be an expensive and not always necessary stage.

What Is a Bachelor’s Degree?

A bachelor’s degree is the first stage of higher education, which lasts 4 years. The Bachelor of Science (BS) degree is the most common in scientific fields and covers biology, chemistry, physics, engineering, and computer science.

The bachelor’s degree program students perform laboratory experiments, learn to analyze data, and master theory. Statistics show that in 2023, almost 18.1 million students in the United States were enrolled in colleges and universities, most of whom received bachelor’s degrees.

After completing four years of study, graduates can immediately start working. A bachelor’s degree offers a significant advantage over a high school diploma, as the salary with higher education is about 68% higher. At the same time, some specialties require continuing their studies to apply for higher positions, receive a higher salary, and remain competitive in the market.

What Is a Master’s Degree?

A master’s degree is the highest academic level, confirming that a person has obtained a certain university degree. It is the second educational qualification after a bachelor’s degree. The duration of the study is about 1.5-2 years, and it varies depending on the higher education institution and the training program.

The main advantage of a master’s degree is the much more in-depth study of the subject matter of the student’s chosen specialty. With a master’s degree, people can explore and work through more complex and broad aspects of their chosen academic field.

Does a Master’s Really Pay More?

When deciding to get a master’s degree, many ask themselves: how much does a master’s degree increase your salary? It seems that if you study more, your salary should be higher. But it’s not that simple. In fact, a master’s degree can help you earn more, but the salary increase is not always as significant as it seems.

Look at the numbers for 2023: the average income with a master’s degree was $81,848 per year, while bachelors earned an average of $77,636. The pay difference between a bachelor’s and a master’s is about $4,200 per year or only $80 per week. At the same time, a master’s degree can vary from $30,000 to $120,000, which can take years to pay off.

But it’s not just the price tag that matters. Many master’s students cannot afford to work full time, getting by with part-time jobs and seasonal work. As a result, some people find themselves strapped for cash while still in school and are forced to look for ways to plug the financial holes, including getting a $500 fast loan. So it’s important to understand whether a master’s degree will really help you build your dream career and whether it’s worth the money, especially since it can significantly increase your salary in some fields, while in others, the difference is negligible. And this is influenced by various factors.

Field of Study

In computer science and engineering, a master’s degree can add significantly to your income, potentially adding up to tens of thousands of dollars per year. In this case, a master’s degree is a solid investment. For example, a second degree in social work only adds a few thousand dollars to your annual salary. That may not justify the cost of attendance.

Industry Demand

Fields like technology, finance, and healthcare typically require a master’s degree. And it’s not just for the salary; it’s for career advancement — without one, you simply can’t get ahead. If you’re pursuing a degree in one of these sectors, the investment in education will likely pay off in terms of higher salary and career advancement.

Geography

Salaries can vary significantly from state to state. For example, a master’s degree holder in Virginia can earn an average of $95,000 per year, while someone in South Dakota can earn around $55,591. It’s important to consider where you plan to work, as the same degree can lead to vastly different salary results depending on your location.

Experience Level

While a master’s degree does provide advanced knowledge, hands-on experience in the field is just as valuable. In some cases, years of hands-on experience can outweigh the benefits of an advanced degree. If you’re already working, you may find that additional certifications or specialized training provide a better return on investment than another degree.

Do You Actually Need a Master’s?

Does a master’s degree guarantee a better job and a higher salary? This is a question that many students ask themselves after completing their undergraduate degree and are faced with the choice of whether to continue their education or start working and gain practical skills. But the answer to this question is not so clear-cut. While some professions require an advanced degree, other high-paying jobs prioritize experience, certifications, and technical skills over additional degrees.

Just think, only about 40 professions require a master’s degree for entry. This means that a bachelor’s degree (or just the right skills) is enough for most jobs to get a high-paying position.

Where is a Master’s Degree Required?

Some professions still require a master’s degree. If you want to become:

• Doctor (MD), Lawyer (JD), or Professor (PhD). A master’s degree is a requirement. Without it, you will not be licensed. Psychologist, social worker, or school counselor. Most states require a master’s degree to obtain a license in these fields.
• Healthcare Professional. Some hospitals and large healthcare organizations prefer candidates with a Master of Health Administration (MHA) or MBA.
• Economist or data scientist. Many government agencies and research institutions require a master’s degree for higher-level positions.

Where a Master’s Degree Can Help, but Isn’t Required?

In some fields, a master’s degree can help advance a career, but it is not always necessary:

• Business and Finance. While a Master of Business Administration (MBA) can open the door to management positions, many financial professionals (accountants, investment analysts, financial advisors) succeed with just a CPA, CFA, or extensive industry experience.
• Marketing and Communications. A master’s degree in marketing, public relations, or journalism can be helpful, but in today’s digital world, a strong portfolio and certifications (like Google Analytics or HubSpot) often carry more weight.
• Public Administration and Policy: Some positions favor candidates with a Master of Public Administration (MPA), but public service experience can sometimes carry more weight than a degree.
• Education: While public school teachers may benefit from a master’s degree to earn a higher salary, many states allow teachers to teach with only a bachelor’s degree and a certificate.

Where Is a Master’s Degree Rarely Needed?

In fast-growing industries, experience, skills, and certifications matter more than additional years of school:

• Tech and IT: Tech giants like Google, Apple, and IBM have lowered the degree requirements for many jobs. Instead, hiring managers seek real-world coding skills, boot camp certifications, and hands-on experience. Fields like cybersecurity, software engineering, UX/UI design, and data analytics value skills-based training over traditional degrees.
• Trades and Skilled Workforce: Electricians, plumbers, HVAC technicians, and other skilled tradespeople can earn six figures with training and certifications — no master’s degree is required.
• Sales and Real Estate: Whether it’s B2B sales or real estate brokerage, strong communication skills and experience are more likely to lead to success than degrees.
• Creative Fields: Graphic designers, video editors, writers, and photographers thrive on portfolios and work experience. A master’s degree in fine art or design is rarely a requirement.

Is the Return on Investment Worth It?

A master’s degree is tempting because it promises a higher salary and better career prospects. But is it worth the money? With tuition fees skyrocketing and student debt reaching record heights, the decision to continue studying is not just a matter of ambition but financial survival.

The average student loan for a master’s degree in the United States is $65,000; for some areas, it is even higher. If you get an MBA from a leading business school, you can pay $150,000+ for tuition alone. On the other hand, graduate students typically earn $13,000 more per year than those with only a bachelor’s degree, which gives them an average salary of about $90,300 per year. But here’s the catch: how long will it take to break even?

If you borrow $80,000+ for a master’s degree and earn an additional $13,000 per year, it may take 6 to 7 years just to recoup the cost of the degree — and that’s without interest. Some careers, such as computer science, finance, or healthcare, often justify the costs, resulting in six-figure salaries. But in fields like education, journalism, or social work, a master’s degree doesn’t always mean a significantly higher income, which makes it harder to pay off debt.

Ultimately, the return on investment in a master’s degree depends on the cost, career trajectory, and salary growth potential. In some cases, this is a turning point. In others, it is an expensive piece of paper.

Is a Master’s Losing Its Value?

In 2023, the question “Is a master’s degree worth it?” is no longer as clear-cut as it used to be. The value of a master’s degree has changed, especially in an environment where labor markets are constantly changing, and skills are increasingly valued above formal degrees. This is no longer just an equation of “more education = more salary.” The world has changed, and it’s changing fast.

Interestingly, about 20% of people aged 18 and over have a master’s degree. This is a significant increase compared to previous generations, but as the number of holders of this degree increases, it loses its uniqueness. Getting a master’s degree is no longer enough—it is no longer a guarantee of career growth.

At the same time, major technology companies such as Google and Apple are revolutionizing their hiring practices. They are starting to reduce the graduation requirements for some positions, focusing on skills and experience. Today, more than half of employers value practical skills much more than a diploma. In the field of certification technology, courses, and real-world experience are becoming no less important than a master’s degree.

However, a master’s degree is still an important consideration in fields such as healthcare, engineering, and data science, For example, nurses with a master’s degree can earn over $100,000 per year, and data scientists in artificial intelligence and machine learning are among the most sought—after professionals

But it’s not that simple. The cost of education is also an important point. The average student debt for those graduating with a master’s degree in 2023 is about $72,000. Given that the total student loan debt in the United States has exceeded $1.7 trillion, many wonder: is this investment worth it? For some, especially in areas where a degree is no longer required for career growth, the return on investment may not meet expectations.

As a result, a master’s degree no longer provides automatic success. While it still matters in some areas, the growth of alternative educational paths such as programming courses, online training, and certifications shows that acquiring the necessary skills for a high-paying job without incurring significant student loan debt is possible.

Conclusion

Whether or not to pursue a master’s degree depends on your specific career field and goals. While the salary for a master’s degree vs bachelor’s degree may differ significantly in some industries, experience and specialized skills may be more important in many fields than a college degree. The cost of a master’s degree and its potential debt must be carefully weighed against the potential for increased income. Ultimately, for some professions, a master’s degree is a worthwhile investment, while for others, it may not be a worthwhile investment of time and money.