Is an undergraduate degree worth more than a technical college degree?
We thought this wasn’t even a serious question – “Of course”, we presumed. “People wouldn’t pay for four years of undergraduate tuition if they could earn the same amount afterwards by attending a two-year technical college.”
However, we checked – and double-checked – the data from 225,000 local service professionals who have listed themselves on Thumbtack. And we were very surprised by what we found.
Tens of thousands of local service professionals on Thumbtack have attained either a technical college degree or an undergraduate degree – and their average hourly rates are exactly the same.
We asked some of our members: “What is the highest level of education you have reached?”
And about half of Thumbtack’s members advertise the hourly rate of their service on their listing (like this person).
When we mapped average hourly rate against educational achievement, we expected to see hourly rates rise with a higher level of education.
And that’s exactly what we found – except that the hourly rate for those with technical degrees and those with undergraduate degrees was exactly the same.
More than 5,000 local service professionals nationwide list their businesses on Thumbtack every week. These include general contractors, wedding photographers, Bollywood dancers, and any other kind of service professional you can imagine. 225,000 local service professionals have listed themselves on Thumbtack since 2009.
About half of the professionals that list themselves on Thumbtack advertise their hourly rate on their listing. And many of these individuals have also responded to a survey in which we asked them: “What is the highest level of education you have reached?”
11,354 service professionals included their educational credentials in this survey.
These service professionals are spread out nationwide and in all categories available on Thumbtack.
The United States is a service economy premised on the ideal that more education always means a higher income. However, this data calls that ideal into question.
Numerous observers – including the Wall Street Journal, venture capitalist Peter Thiel, and the Chronicle of Higher Education – have recently questioned whether paying for an undergraduate education is worth the sometimes steep cost.
There are many situations in which an undergraduate degree is worth the investment: it’s a necessary springboard for becoming a doctor or lawyer or investment banker. And there are many non-monetary benefits of pursuing higher education, such as expanding your intellectual horizons and meeting new people. However, it is very clear from our data that an undergraduate degree is, in strictly financial terms, often a poor investment.
More than one third of Thumbtack’s 225,000 service professionals have received an undergraduate degree. According to the College Board, the tuition and fees of an undergraduate degree amount to about $40,000 for public schools. This implies that Thumbtack’s service professionals have spent at least $3.2 billion on degrees that have not boosted their earnings above workers with only a technical degree.
There are at least 20 million service professionals in the United States, which suggests that the current service sector workforce has spent at least $240 billion on undergraduate degrees that have resulted in incomes no different than individuals with a technical degree.
These figures are a lower bound because many people go to private schools – which cost two or three times as much as public schools. These figures also only account for the cost of tuition and fees, and include neither the cost of rent and other living expenses, nor the opportunity cost of lost wages during years students could have spent working.
This data is further evidence that attending a four-year college to obtain an undergraduate degree may be no better for your career than attending a two-year technical college.
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