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Quantitative Research Methods

Is graduate education cost effective?

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Consider your graduate education as a sort of program that is designed to produce a desired outcome. Is it cost-effective? This exercise is far from accurate in determining this, but may make you feel better about being a graduate student. Or maybe it isn’t.

Write down three jobs that you had prior to entering graduate school, or if you haven’t had three jobs, write down three jobs that you could have had prior to entering graduate school

Go to the Bureau of Labor Statistics website ( and locate the most recent National Compensation Survey.

Look up the hourly wages of the three jobs noted in Step 1 (or jobs that most closely resemble those jobs). In the 2001 NCS, this can be found in Table 3.

Multiply the hourly wages by 2080 (40 hours per week x 52 weeks per year) to estimate your annual earnings.

Write down three jobs that you would like to hold once you have completed your education. Look up the hourly wages of these jobs. Multiply the hourly wages by 2080 to estimate your annual earnings.

Using your own bills, or estimates provided by your own school, estimate the cost of a graduate degree (include education and appropriate, housing, meals, interest on student loans, etc.).

Subtract the annual income in Step 4 from the annual income in Step 5. In theory, this should be the annual wage benefit of having a college degree.

Divide the cost of your education (found in Step 6) by the annual wage benefit found in Step 7. This is an estimate of how many years it will take to make up the cost of your education given the discrepancy in wages.

Write 1 page cost-effectiveness report in which you evaluate the efficiency of your own college education.


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