Someone once asked me why I went to law school and my response was “I was 22 and had no idea what to do with my life so I went to law school to prolong the decision by three years.” Some people who go to law school don’t major in the law; some, like me, major in life postponement.

Setting aside self-reflection though, are graduate studies worth it? It is a difficult question to answer since “graduate studies” encompasses such a huge variety of different disciplines from second-entry professional oriented degrees (medicine and law) to general masters/doctorate programs to MBA’s.

But, on a general basis, the statistics are consistent. People who hold graduate studies tend to make more than people who only one degree. A 2003 survey by Salary.com found that master’s level degree holders tend to make on average $10,000 more than their counterparts with one degree with an average salary of $53,000 (USD).  A similar survey conducted by QS International Recruiters in 2007 found that, across the board, master degree holders make more than employees with one degree.

But what is the opportunity cost of pursuing graduate studies? In 2003, according to  Salary.com article, an average cost of graduate studies was $26,000- a figure that most certainly has gone up since then. This does not include the opportunity costs of giving up salary during your studies (assuming you attend on a full-time basis). Thus, your salary may increase $10,000 but it cost you upwards of $25,000 to achieve it.

However, this is a bit of a short-sighted approach to take. There are a wide variety of intangible factors to consider. I once asked the most successful lawyer I know of my vintage how he made partner, got big clients etc. and his answer was very straightforward- he kept in touch with everyone he went to law school with and they kept sending him referrals.

Many of my best friends, business associates and trusted professional colleagues I met in law school or through contacts in law school. It is true that you get ahead by who you know and being surrounded by driven and smart people has a way of pulling up your boot straps and getting contacts into circles you may not otherwise have opportunity to meet. Those types of things are priceless so doing the mental arithmetic of (salary increase) – (cost of school) is not exactly helpful (and completely ignores the obvious of the joys of learning). So what should you consider?

• The more technical the sector, the greater the effect the positive effect of education on salary: The QS survey found that in highly technical fields of work, like aerospace and high tech, employees with a masters degree were better compensated than an employee with one degree and 4 years of work experience.
• But leaving too early may hurt you in particular fields. Here’s the flip-side of the argument. The same survey found that someone with 4 years of experience in consulting or professional services with one degree made more than someone with a masters (I am presuming a MBA). It is only one survey but there is a certain recognition in some circles that experience is worth more than schooling especially when people are doing their MBA’s with too little work experience (I am strong believer in that you have to have some real life and work experience before you do your MBA).
• Part-time studies can be a good way of controlling costs but… Studying while you work can be a practical approach to earning income while you improve yourself but how much of the intangible qualities of schooling are you missing? The part-time law studies were always outside the social circles but I can remember who I studied with and who I may give referrals to. As a tip, if you do part-time studies while you are working, try to get your employer to recognize this through either more flexible hours or a guarantee put in writing of a promotion and/or raise after you graduate.

…in certain larger organizations, employees can take educational leaves. Depending on the terms and conditions, you could continue to be paid benefits during your leave and they have to hold your position for you when you return. Thus, taking an education leave may be a good way to avoid lay-offs.

There isn’t a right answer to whether you should go back to school or not. Just things to consider but I would caution anyone to study a topic because it is recession proof or the job prospects are good. Most of us who majored in law/life postponement did not last long practicing as lawyer. Our hearts weren’t into what we studied and it became a burden and not a passion. Just remember to study what you love and, despite this post, don’t make a purely financial calculation.

If you want to know what life is like as a MBA student, I recommend the Financial Blogger’s posts on this topic.