In an economic sense, education represents a form of investment. Just as companies invest in new equipment to improve their productivity, workers can invest in themselves by gaining more education, improving their knowledge, skills and earning potential in the marketplace. To these ends, many professionals pursue master's degrees, seeking a career change or advancement and higher earnings in their current job. "The New York Times" reported in 2010 that a master's degree helps a recipient stand out, often commanding better pay.
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"The New York Times" reported in 2009 that a master's degree results in a 20 per cent higher salary than a bachelor's degree. The website Salary.com reported that bachelor's degree recipient had an average annual salary of £27,950 in 2003, while a master's degree holder earned an average of £34,450 a year. Salaries vary widely, however, with fields of study. A person with a master's degree in business or engineering generally earns more than someone with a master's in a liberal arts field.
The average salary for a master's degree also varies with the recipient's work experience. Based on a survey of more than 1,600 master's degree recipients, PayScale.com reported in 2011 that a master's degree recipient with less than a year of work experience earned an average of £27,527 a year, while a person with more than 20 years of experience earned more than £53,300 a year.
Not Created Equal
Not all master's degrees are created equal in terms of the earning potential they represent. MSN Money Central writer Liz Pulliam Weston reported in 2007 that a master's degree represents an average increase in lifetime earnings of about £117,000. However, this boost in earnings over a person's working life differs across fields of study. A master's degree in business or engineering has the greatest payback, representing increases of more than £227,500 over a lifetime. A master's degree in science or education, meanwhile, provides a smaller boost, ranging from £65,000 to £88,400. Weston added that a master's degree in a liberal arts or social science field had little return on average, with recipients earning only slightly more, and in some cases less, than the average bachelor's degree holder.
When deciding whether a master's degree will boost your salary, it is important to consider the marketability of the degree as well as the cost of the education itself. Thousands of dollars for a master's degree that translates to only slightly higher pay may not be a worthwhile investment.
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