Earnings of Tennessee College Graduates Vary Dramatically Five Years After Graduation

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An American Institutes for Research and College Measures study of those earning a post-secondary degree or certificate in Tennessee finds that the median wages of individuals with associate degrees and long- term certificates often exceed those earned by bachelor degree holders in the first year of employment, an advantage that mostly disappears after five years in the workplace.

A study of those earning a post-secondary degree or certificate in Tennessee finds that the median wages of individuals with associate degrees and long- term certificates often exceed those earned by bachelor degree holders in the first year of employment, an advantage that mostly disappears after five years in the workplace.

The report, Tennessee Public Post-secondary Graduates and the Labor Market: Employment Prospects and Wage Trends, compares the average first-year and five-year earnings of recent graduates with bachelor’s degrees and sub-baccalaureate credentials (associates degrees, certificates and diplomas) across Tennessee.

In most of Tennessee’s nine public universities, the median wage of graduates is between $500 and $1,000 of the state median for all graduates with bachelor’s degrees. The main exception is the University of Memphis, whose graduates’ median wage is $1,700 above the state median—probably because Memphis has the state’s highest priced labor market.

“This is a message of hope. You don’t need to go to a flagship university to get a good job. There are many successful paths into the labor market,” said Mark Schneider, author of the report and president of College Measures, which conducted the study.

The report and a more detailed look into the data and patterns of wages and labor demand across Tennessee are available free on the new EduTrendsTN website (http://www.edutrendstn.com), developed by College Measures in partnership with the Tennessee Higher Education Commission (THEC) and the Tennessee Department of Labor and Workforce Development. College Measures provides data and analysis on higher education. It is a joint venture of the American Institutes for Research (AIR) and the Matrix Knowledge Group. The new report was funded by the Lumina Foundation.

“Students have the right to know before they go and know before they owe,” explained Schneider, a vice president and Institute Fellow at AIR. “Student debt is mounting and the ability to pay off this debt depends on wages. Prospective students need to be as well-informed as possible about every aspect of their choice of program, degree and institution.”

The report found that at the end of the first year, graduates with associate degrees and one- or two- year certificates earned more than the average bachelor's degree holder. Long-term certificate holders earned more than $40,000, those with associate degrees, $37,000 and those with a bachelor’s, $34,262.

This gap typically closes as graduates with bachelor’s degrees experience higher rates of wage growth. After five years, bachelor’s graduates had median wages comparable to those with an associate’s graduates ($41,888 versus $41,699), and only slightly trailing certificate holders ($42,250).

“Even as the gap between the holders of sub-baccalaureate degrees and bachelor’s degree graduates narrows, the median household income in Tennessee in 2011 was $41,693. In short, many sub-baccalaureate credentials can be entryways to the middle class,” Schneider said.

Associate Degrees & Credentials

  •      Among the state’s 10 associate degree programs with the most completers, graduates in Business Administration, Business Operations, Liberal Arts, and Management Information Services earned wages below the state median for all associate’s degrees five years after finishing their degrees.
  •     The program with the highest median wage (more than $61,000) five years after graduation was Electrical Engineering Technologies/Technicians. Graduates in this field also saw their wages grow fastest from their first to fifth year after graduating.
  •     Graduates with associate’s degrees in Nursing from every community college in the state earned more than graduates with associate’s degrees in Liberal Arts.
  •     More than 40% of minority graduates in each credentialing program were first-generation college students over the age of 25.

Bachelor's Degrees

  •      Among bachelor’s graduates, earnings associated with different instructional programs vary widely. Graduates’ earnings vary less from university to university, perhaps because graduates from institutions in smaller markets may migrate to larger ones.
  •     Four-year cumulative growth rates for business graduates from every Tennessee university were higher than those of graduates with multi- or interdisciplinary degrees. Business graduates’ wage growth ranged from 18 percent (Austin Peay) to 45 percent (University of Tennessee, Martin). Among inter- or multidisciplinary graduates, the growth rate ranged from about 12 percent (Austin Peay and Middle Tennessee State) to 27 percent (University of Memphis).

The report is available on the College Measures, http://www.collegemeasures.org, and AIR, http://www.air.org, websites.

About College Measures

Established in 2011, College Measures is committed to informing and improving the decision-making process for students, parents, and policy makers and in so doing, help create a more efficient, productive and effective higher education system. For more information visit, http://www.collegemeasures.org.

About AIR

Established in 1946, with headquarters in Washington, D.C., the American Institutes for Research (AIR) is a nonpartisan, not-for-profit organization that conducts behavioral and social science research and delivers technical assistance both domestically and internationally in the areas of health, education, and workforce productivity. For more information, visit http://www.air.org.

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Larry McQuillan
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