What kind of salary will a child make after graduating from college?
This question preoccupies many parents of teenagers who are aghast at college price tags. These parents want to make sure that the money they plunk down for a bachelor’s degree will ultimately pay off with good-paying jobs for their children.
To get an idea of what kind of salaries new grads are earning, I turned to Job Search Intelligence, a Los Angeles firm that provides salary data.
In their research, JSI’s data scientists pulled actual average salary data using more than 50 education and labor market surveys. The sources included the Bureau of Labor Statistics, Census Bureau, Department of Labor, National Center of Education Statistics, as well as the Federal Reserve and information from the colleges themselves. The scientists assimilated the data into a single database that represented the equivalent of a longitudinal study of individuals who have been in the labor market for up to 10 years.
Average New Graduate Salaries
The following is a breakdown of the salary ranges that represent what new college graduates across the county are earning:
|2 percent||$60,001 - $70,000|
|4 percent||$50,001 - $60,000|
|20 percent||$40,001 - $50,000|
|59 percent||$30,000 - $40,000|
|13 percent||Less than $30,000|
Schools with the Highest Paid Graduates
Not surprisingly, most of the students earning the highest salaries attend elite research universities. Here are the top 25 institutions with the highest paid recipients of new bachelor degrees:
|1. Massachusetts Institute of Technology||$106,900|
|2. Harvard University||$106,300|
|3. Stanford University||$102,300|
|4. Albany College of Pharmacy||$101,100|
|5. University of Pennsylvania||$92,300|
|6. Duke University||$87,600|
|7. Georgetown University||$86,100|
|8. Columbia University||$79,300|
|9. Maine Maritime Academy||$77,800|
|10. University of Sciences||$75,500|
|11. Princeton University||$71,600|
|12. Carnegie Mellon University||$70,900|
|13. Dartmouth College||$70,500|
|14. University of Chicago||$69,800|
|15. Cornell University||$68,900|
|16. Tufts University||$68,700|
|17. University of Notre Dame||$68,600|
|18. Babson College||$68,300|
|19. Colorado School of Mines||$66,200|
|20. Case Western Reserve University||$65,800|
|21. Northwestern University||$65,600|
|22. University of the Pacific||$65,500|
|23. Rose-Hulman Institute of Technology||$64,800|
|24. University of Southern California||$64,700|
|25. California institute of Technology||$64,000|
A major reason why the elite universities produce grads with high salaries is because the majority of students attending these institutions come from wealthy families. Students from high-income households, regardless of where they attend college, are more likely to also end up in an enviable income bracket.
In addition, income is highly correlated with SAT and ACT scores, which are a necessity for admission into elite schools. The higher a household’s income, the greater the average test scores are.
SAT scores are a very high predictor of future salaries. That’s why it’s easy to argue that Yale and Harvard don’t make their students winners; they pick winners to attend their elite institutions.
Obscure Schools That Made the List
In the list of the 25 schools, you will notice some unexpected names, which illustrates an important salary reality.
The little-known institutions on the list, such as the Maine Maritime Academy, the University of Sciences, and the Colorado School of Mines, primarily educate students who go on to become:
- Health professionals
- Business professionals
The research documents that the college a teenager picks, as well as an academic discipline, are both important to enjoying a successful career. The choice of a major, however, is more critical.
Except at the most elite schools, the average salaries of graduates increase by 1 to 2 percent a year during the first 10 years of the student’s working career. The reason for the modest rise is because most students graduate with soft majors, such as Psychology, Communications, Journalism, English, History and Art.
There are two main exceptions to the soft-major salary trend.
Graduates who earn a soft degree from an elite university or highly ranked liberal arts college are more likely to obtain a good-paying job.
It’s also possible to buck the soft-major trend for grads, who obtain internships and/or relevant work experience and develop skills that employers want. Gun shy about millennials, hiring managers are placing a premium on work experience, which is why it’s critical to obtain some while still in school.
A Salary Tool
You can find a variety of tools and data that JSI has generated on the website of Educate to Career, a nonprofit that is focused on educating families on making smart college choices.
A favorite free tool of mine on the website will allow you to obtain average salary information by academic majors at individual colleges.
I’m using University of California, Los Angeles graduates with economics degrees to illustrate what you can find out. Using the tool, I discovered that the average starting salary for UCLA econ majors is $62,600. You’ll also see the average salaries for the most common jobs these new UCLA grads obtain, including financial advisors ($58,600), financial analysts ($77,000) and customer service reps ($45,000).
With the tool you can also compare salaries among schools. For instance, at California State University-Los Angeles, which is just 21 miles away, the average economic major is making a much lower beginning salary ($46,000).
To use this ETC tool, click on the Counselors & Consultants hyperlink on the homepage, and then click on College and Major Outcomes.