What Impact Does One’s Degree and Experience Have?
Previous administrations of the SIOP salary survey have indicated that education and experience level influence reported earnings. For example, the correlation between years of work experience and 2012 primary income was .45 (p < .05) and between one’s highest degree obtained and income was .20 (p < .05; Khanna et al., 2013). The current survey produced similar results; both relationships were significant (p < .05), with the relationship between experience being stronger (r = .38) than that of degree earned (r = .23). Below we provide a breakdown of differences across these various background variables.
Degree. On average, terminal master’s degree programs are completed in 2.5 years whereas doctoral programs are completed in 5.3 years (Rentsch, Lowenberg, Barnes-Farrell, & Menard, 1997). What is the impact of those additional years of education? The difference in annual incomes reported across degree types is evident in Figure 1. Doctorate level I-Os reported earning 41% greater median primary income than did master’s level I-Os. The average incomes of respondents holding doctorate degrees ($138,944) were significantly greater than those of respondents holding master’s degrees ($93,943; t(1061) = 7.06, p < .001). Of note is the relative stability of this difference over time which peaked in 2011, when doctorate level I-Os reported earning 47% more, and hit its lowest point in 2000, when the reported incomes of doctorate level I-Os were 34% greater than those of master’s level I-Os.
Years of relevant experience. Beyond educational background, experience also plays an important role in determining I-O income. As relevant experience accumulates, I-Os report earning higher annual income. On average, I-Os with master’s earn $2,869 more for every year of experience; whereas, I-Os with doctorates earn an additional $3,047 for every year of experience.2 Figure 2 provides a summary of median income by years of experience. Of note is the income plateau associated with 20 or more years of experience, indicating that, on average, income does not substantially increase beyond this point.
Figure 2. Median 2015 Primary Income by Years of Experience3
Starting salary. All you graduate students and recent grads out there may be wondering what you should expect to make as you begin your career. To provide an answer, we looked at the 2015 incomes of respondents who reported receiving their degree between 2013 and 2015. Those who recently received a doctorate degree earned a median primary income of $89,300 (n = 124) in 2015. Those with recent master’s degrees reported a median primary income of $67,000 (n = 67) in 2015.
Area of Employment
Previous administrations of this survey have identified various employment factors that are likely to impact income, including career path and employment location. For example, in 2012, the relationship between respondent’s status as an academic and income was small yet significant (r = -.13, p < .05); current results mirror those previous findings (r = -.17, p < .05). Below we summarize income differences across career path, industry, and location.
Career path. A little less than a third (28.8%) of respondents reported working as an academic; whereas over two-thirds represented the practitioner population. Results indicated that career path produced a significant impact on income (t(1063) = 2.77, p < .05). As seen in Figure 3, practitioners also reported slightly higher median incomes than academics in 2015.
Figure 3. Median Primary Income by Career Path3
Differences between the incomes earned across different career paths could be masked by a potential confound of career path with highest degree earned. Indeed, although only 3% (n = 10) of academic I-Os report a master’s as their highest degree earned, 31% (n = 297) of practitioners reported the same. Differences between these career paths become more pronounced when the highest degree earned is considered (see Figure 4); master’s level practitioners earned 33% more than master’s level academics, and doctorate level practitioners reported earning 23% more than their academic counterparts. Thus, career path does appear to produce a substantial impact on income when degree is taken into account.
One final point of interest pertains to the number of hours that each career path reported working on average per week. Whereas I-Os working in academia made 23–31% less than practitioners with the same qualifications, they reported averaging 5 additional work hours per week; the median number of hours that practitioners reported averaging per week was 45, whereas the median number of average hours per week reported by academics equaled 50.
Figure 4. Median 2015 Primary Income by Career Path and Highest Degree Earned
Industry. Survey respondents represented a number of industries ranging from IT and computers to government and military, with the two most common industries being academic (university or college) and consulting. Figure 5 provides the median annual income by industry for master’s and doctorate level I-Os combined. Self-employed consultants and I-Os working in IT reported the greatest median primary incomes, whereas those in state or local government reported the lowest annual median incomes. The results related to self-employed consultants are likely driven, in part, by the variable nature of this industry; indeed, the incomes reported by self-employed consultants ranged from $25,000 to $1,000,000, representing the greatest variance (σ = $177,180.91) in income within the industries investigated.
Figure 5. Median 2015 Primary Income by Industry3
Although survey respondents represented a breadth of geographies, clusters of I-Os working in specific areas emerged. Table 2 presents the range of locations employing I-Os and provides median primary incomes associated with these areas for master’s and doctorate level I-Os combined. Washington DC represented the most common location for I-Os, followed by Chicago, IL. Median primary incomes adjusted for cost of living4 displayed a considerable amount of variance across location. Based on cost of living calculations, the Minneapolis/St. Paul, MN and Detroit, MI areas represent the locations in which I-Os earned the highest relative incomes; however, differences across geographic areas are likely impacted by differences in the percentage of doctorate respondents working in each area.
Table 2 presents the annual median income by location, including the percentage of doctorate and practitioner respondents working in each area. Locations with the lowest numbers of doctorate level I-O responding to the survey tended to also represent the areas where respondents reported receiving the lowest cost-of-living adjusted median incomes. For example, although respondents from Manhattan reported the lowest cost-of-living adjusted median incomes (i.e., $67,671), these respondents were also less likely to hold doctorate degrees than respondents working in other areas (i.e., 65% of respondents in Manhattan reported holding a doctorate degree vs. greater than 70% in other areas). Of note, is the dramatic difference in median income reported by respondents in Manhattan when compared with that of the 2012 survey; this and other differences over time are further explored in the technical report.
Annual 2015 Primary Median Across Geographic Locations3
Overall, these data point to the maintained value of our professional services. Comparisons with previous years’ data collection efforts indicate that SIOP members report increases in median incomes that are in line with national inflation levels, ranging from a yearly increase of $2,869 for master’s level I-Os and $3,047 for doctorates.
The results further indicate that several factors impact the annual primary median incomes reported by SIOP membership. Education level has a significant impact on median income, with the median income reported by doctorate level I-Os being $34,318 greater than that of master’s level I-Os. Median income levels also varied across other employment-related factors, including relevant experience level, career path, industry of employment, and geographic location. In a future article, we’ll provide detail around the relative contribution of these variables to the prediction of I-O income. We’ll also take a closer look at gaps in income across various subgroups. Stay tuned for these additional insights and be sure to check out the technical report for greater detail around all of these findings.
 Using the United States Bureau of Labor Statistics (n.d.) Consumer Price Index inflation calculator, the median salary for a master’s level I-O reported in 1999 ($58,000) would produce the same buying power as a salary of $82,514.92 in 2015. The median salary for a PhD level I-O reported in 1999 ($83,000) would produce the same buying power as a salary of $118,081.70 in 2015.
2 Values reflect unstandardized slope coefficients derived via simple regression analyses.
3 Figures 2, 3, and 5 and Table 2 contain combined data for master’s and doctorate level respondents. For a more detailed breakdown of primary income, please see the technical report here.
4 Cost of living calculated using the PayScale, Inc. Cost of Living Calculator (2016); all incomes were adjusted to their Washington, DC equivalent using psychologist as the job title.
5 Less than 10 respondents reported working in Miami, FL and Phoenix, AZ, therefore, incomes representing these US metropolitan areas were combined to protect respondent anonymity.
6 Less than 10 respondents reported working in Ottawa, Ontario; Vancouver, BC; Calgary, Alberta; and Toronto, Ontario; therefore, incomes representing these Canadian metropolitan areas were combined to protect respondent anonymity.
Bureau of Labor Statistics, U.S. Department of Labor. (n.d.). CPI inflation calculator. Retrieved from http://www.bls.gov/data/inflation_calculator.htm
Khanna, C., Medsker, G. J., & Ginter, R. (2013). 2012 income and employment survey results for the Society for Industrial and Organizational Psychology. Bowling Green, OH: Society for Industrial and Organizational Psychology. Retrieved from http://www.siop.org/2012SIOPIncomeSurvey.pdf
Kozlowski, S. W. J. (July, 2015). President’s message. The Industrial Psychologist, 53(1), 6-10.
PayScale, Inc. (2016). Cost of living calculator. Retrieved from http://www.payscale.com/cost-of-living-calculator
Rentsch, J. R., Lowenberg, G., Barnes-Farrell, J., & Menard, D. (July, 1997). Report on the survey of graduate programs in industrial/organizational psychology and organizational behavior/human resources. The Industrial Psychologist, 35(1), 49-68.