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Measuring the Salary Value of Education and Work Experience in Massachusetts

Original Research • November 22, 2019

A Regression-Model Study of Salaries in New-Hire Job Postings

Sources of Value-Added.

Massachusetts has a unique work-force: well-educated, highly experienced, and hardworking. For years, salaries more or less stagnated as Massachusetts employers benefited from a large pool of underemployed and unemployed talent. In that tough, employer-driven market, workers who wanted to learn new skills or seek a better credential typically chose to go back to school and earn a graduate degree.

In the past few years, as the pool of workers was tightening, New Jobs wondered just how much impact a graduate degree had on salary. Did it have more value than work experience? Or would those struggling workers be better off gaining skills in a different way?

In November 2018, New Jobs published its analysis of the effect of education and work experience, Which is More Valuable—Education or Work Experience? The results were startling. For the state’s employees as a whole, the salary value of work experience contributes eight times as much to their salary as education does. And that disparity grows over time. The study calculated that the salary value of education declines rapidly after graduation, falling by 50 percent every 3.5 years.

What changed?

In short, the job market has evolved.

Since 2016, the Massachusetts workforce has benefited from higher utilization as measured by lower unemployment rates. It no longer makes economic sense for individuals who want to gain new skills and increase their pay to stop work, pay to obtain a graduate degree, then return to work and try to recover their costs while hoping their employer chooses to reward them for their scholarly efforts.

Correspondingly, employers are finding that requiring advanced degrees shrinks the pool of qualified candidates for their open positions. Add to this the fact that work experience preferentially helps their new hires be more successful and productive, and the value of the advanced degree falls even further.

It’s all about your skills.

In 2019, New Jobs decided to put its earlier research to the test. We specifically sought current salary information for actual job openings in the current employment market in the Commonwealth.