Working Paper: NBER ID: w30105
Authors: Joseph G. Altonji; John Eric Humphries; Ling Zhong
Abstract: This paper uses a college-by-graduate degree fixed effects estimator to evaluate the returns to 19 different graduate degrees for men and women. We find substantial variation across degrees, and evidence that OLS overestimates the returns to degrees with high average earnings and underestimates the returns to degrees with low average earnings. Second, we decompose the impacts on earnings into effects on wage rates and effects on hours. For most degrees, the earnings gains come from increased wage rates, though hours play an important role in some degrees, such as medicine, especially for women. Third, we estimate the net present value and internal rate of return for each degree, which account for the time and monetary costs of degrees. We show annual earnings and hours worked while enrolled in graduate school vary a lot by gender and degree. Finally, we provide descriptive evidence that gains in overall job satisfaction and satisfaction with contribution to society vary substantially across degrees.
Keywords: graduate education; wage rates; job satisfaction; gender differences; earnings
JEL Codes: I21; I24; I26; J16; J24; J28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| returns to graduate degrees vary significantly across fields and by gender (I26) | gender disparity in returns (J79) |
| return to medicine is 0.718 for men (I11) | return to medicine is 0.527 for women (I26) |
| return to law is 0.492 for men (J79) | return to law is 0.543 for women (K36) |
| most earnings gains derived from increased hourly wage rates (J31) | increased hourly wage rates (J38) |
| graduate degrees affect job satisfaction (A23) | job satisfaction increases for men across most fields (J28) |
| job satisfaction increases for men across most fields (J28) | effects vary by field (C93) |