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New Study of US Graduate Salaries Reveals the True Value of a College Degree

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The average cost of a  four-year degree in the USA is now well over $100,000.

And so the big question is, are college degrees worth that sizable investment?

A recent study from answered that question with a resounding yes. By analyzing US Census data on average salaries among high-school and college-educated workers, it revealed a significant graduate salary earning premium across almost every US state and city.

In other words, having a college degree significantly boosts your lifetime earning potential, no matter where you live in the USA.

Here’s a breakdown of all the data.

How much more do graduates earn in each US state?

California has the biggest graduate salary premium among the US states. Professionals with a college degree on their CV are earning 96% more than their high-school-educated counterparts. On a dollar basis, that works out to an extra $37,000 per year. No wonder the gap between the haves and the have-nots continues to widen in The Golden State.

New Jersey is another state with a high graduate salary premium; it’s over 90%. Other states where graduates are out-earning the rest of the workforce by a significant amount include Maryland, Washington, and New York.

On the other end of the scale, Vermont’s college-educated professionals might wonder if taking on all that student debt was really worth it. Vermont has the smallest graduate salary premium of any US state; it’s just over 30%.

Graduate salary premiums in US states by gender

The pay disparity between high-school and college-educated workers in California widens even further when looking at the data on gender. Male workers without a degree in California earn an average salary of $42,000, while their college-educated peers make nearly $90,000; that’s a graduate salary premium of over 100%.

And the pay gap is more significant among female high-school educated workers and college graduate professionals. There are four states where the graduate salary premium for female graduates is over 100%. They are New Jersey (105%), Texas (104%), California (103%), and New York (102%).

The research suggests that college-educated females earn around $50,000 more annually. Over a working lifetime, that could add up to an additional $3 million, making the investment of a college degree well worth it in the long run.

The city in every US state with the highest graduate salary premium

The researchers also segmented the data by cities. And that’s when those salary premiums start to get really wild.

For example, the graduate salary premium in Sugar Land, Texas, is a massive 201%.

New Rochelle, New York, is another US city where college graduates earn 3x more than high-school graduates.

The US cities with the highest graduate salary premium

But here’s where those salary premiums get even crazier.

Hoboken, New Jersey, is the US city with one of the highest graduate salary premiums in the entire study. It’s a city where college graduates earn, on average, 305.63% more than workers with only a high school diploma. The researcher ran the numbers and calculated that Hoboken’s salary premium equals an additional $81,000 per year.

Palo Alto, California, also appears in this part of the study. It has a graduate salary premium of 256%. Palo Alto is a city in the northwestern corner of Santa Clara County, California, in the San Francisco Bay Area. The city has a high concentration of tech and defense companies that pay huge salaries to the best college graduates.

US cities with the lowest graduate salary premiums

It’s not all bad news for US high school graduates. There are several US cities where the salary disparity between non-college-educated workers and those with a degree is down to just a few percent. For example, the graduate salary premium in Schaumburg, Illinois, is only 7.83%.

And there are several US cities where high school-educated workers are out-earning those with a degree. They include Johnson City, Tennessee, where the salary premium for college grads is -12%.

But the best place to be a high school-educated worker, at least in terms of earning potential, is Gary, Indiana, where the salary premium disparity dips all the way down to -50%. Flip that around, and it means high school-educated workers in Gary are earning 50% more than those who paid over $100k to fund four years of college.

The graduate salary premium for men and women in US cities

In John’s Creek, Georgia, men with a college degree are out-earning high school-educated workers by 341%. We see similar figures coming out of Folsom in California and Newton City, Massachusetts.

In Edina, Minnesota, the average salary for a high school-educated woman is $13,851. That’s 390% less than the pay for the average college-educated woman working in the city, who takes home just under $70,000.

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Taylor Tomita