Women have more to gain from a master’s degree, says IFS
Today, women, universities, and organisations are working to close the gender gap. According to the National Center for Education Statistics, in 1880, women earned only 1.3% of all master’s degrees conferred. By 1910, women earned more than a quarter of all master’s degrees, and by 1980, nearly half. As the Russell Sage Foundation reported, from then onward, the rate of women’s master’s degree completions began to soar, and by 2010, women were awarded roughly 50% more master’s degrees than their male peers.
According to professional career coach, speaker, and author of “Recession Proof Yourself!”, Elizabeth Lions, women now understand that success often begins with higher education. “Women are taught that education is the way to get ahead, so many will consider master’s degrees or certifications,” she says.
According to research published by the Institute for Fiscal Studies (IFS), women get the greatest financial benefits from pursuing postgraduate degrees, despite their pay levels still well behind those of men with master’s degrees and doctorate qualifications.
The study found that when comparing those who had finished their master’s degrees earlier in their careers, and similar individuals with undergraduate degrees, women gained a pay bonus worth 2% of their incomes. It was found that men saw a -2% effect compared with what they would have earned without a postgraduate qualification.
IFS reports that a woman with a master’s degree earn considerably more at the age of 35 that those with only an undergraduate degree, with average earnings of GBP£35,400 a year on average, compared with GBP£32,500 for those who do not go beyond undergraduate level. For men, master’s graduates earned GBP£55,800 on average, GBP£5,000 more than those with only an undergraduate degree.
However, the IFS also states that men would probably have earned as much without the postgraduate qualification, based on the earnings of their peers.
“Most of these earnings differences can be accounted for by master’s graduates coming from better-off backgrounds, and having higher prior attainment, than those who do not pursue postgraduate qualifications,” the IFS said.
Laura van der Erve, co-author of the report and a research economist at IFS, said: “On average, master’s graduates do not see substantially higher earnings than otherwise similar individuals who don’t go beyond undergraduate level. However, this obscures huge differences across subjects, with some subjects such as law and business boosting earnings by more than 15% at age 35. But graduates of courses such as creative arts, English and philosophy have earnings more than 10% lower than similar individuals who did not pursue a postgraduate qualification.”
It was also found that how much of an income boost individuals received from postgraduate studies depend on the earning potential of their undergraduate subject. For those with degrees in relatively low-returning courses such as humanities, pursuing a postgraduate qualification in teaching, law or economics was likely to improve their income.
The earning gains for women are even higher for those who had pursued doctorate degrees, and the loss for men was larger. The IFS estimated that the returns for women with PhDs was 8%, while the comparative loss for men was -9%.
“There are several other possible advantages to postgraduate degrees – they potentially allow students to specialise in an area they are passionate about, and they also appear to have some insurance value,” said Jack Britton, co-author of the report.
The institute’s main estimates were based on individuals who graduated with their first degrees between the mid-1990’s and the mid 2000’s. The IFS cautions that returns might be different for current students.