A recent survey by Resume Genius involving 1,000 U.S. hiring managers found that having a master's degree does not necessarily improve job performance. In fact, 62% of these managers believe employees with master's degrees perform about the same or worse than those with only a bachelor's degree and experience. Despite this, 72% of hiring managers are still willing to pay higher salaries to candidates with master's degrees, with many offering raises of 10% to 20% or more compared to those without advanced degrees.
The higher salaries linked to master's degrees seem to stem from the perception that such degrees indicate motivation, discipline, and dedication, rather than guaranteed superior job performance. Eva Chan, a senior PR expert at Resume Genius, explains that employers view a master's degree as a signal of potential and commitment, even if it doesn't correlate directly with better work outcomes. However, many employers are increasingly recognizing that experience can demonstrate similar qualities, leading to a growing trend toward skills-based hiring. For example, companies like JP Morgan Chase and Walmart are shifting focus away from degree requirements toward practical skills and experience.
Interestingly, Generation Z hiring managers are twice as likely as Baby Boomers to see master's degree holders as better performers, possibly because advanced education is more recent and relevant in their experience. Meanwhile, the number of Americans holding master's degrees has doubled from 2000 to 2019, reaching about 25 million adults.
While a master's degree can offer advantages such as career advancement and higher pay, it also comes with significant costs, averaging over $62,000 in tuition and more than $94,000 in federal loan debt. The value of a master's degree varies by industry; it tends to be more beneficial in fields like education and urban planning, where credentials strongly influence pay and promotion. In contrast, rapidly changing sectors like technology and marketing may prioritize practical experience over academic qualifications.