Psychology graduate degrees show a negative 8 percent cost adjusted return (Credits: Unsplash)
Economists Lawrence Katz and Claudia Goldin in September 2025 that the college wage premium still exists, but has barely moved since 2000. Around the same time, the World Economic Forum found that artificial intelligence skills now carry a 23 percent wage premium, compared to 8 percent for a bachelor’s degree on its own. Even in areas often linked to strong demand, such as computer science, the cost adjusted return stands at about 6 percent. Altonji and Zhengren Zhu, uses administrative data from the Texas Education Research Center to estimate outcomes across 121 graduate programmes.
“If you are thinking about graduate school, you want to get some information about what the earnings potential is coming out of the degree as well as the kinds of occupations and jobs it leads to,” Altonji said in an interview with Fortune . Every generation inherits a simple idea about education: study more, earn more. For years, that assumption has guided student choices, especially for those considering postgraduate degrees. But in the 2020s, that equation is beginning to change. The change is not loud or sudden. It is showing up instead in research papers, wage data and hiring patterns that suggest the link between degrees and returns is becoming less predictable. A growing body of economic research points in the same direction. A working paper from the Federal Reserve Bank of San Francisco attributed this stagnation largely to weakening demand for degree holders. Other fields also show weak or negative outcomes. Social work and curriculum and instruction degrees fall into similar territory. The study, co authored by Joseph G. Instead of only comparing salaries, it also considers what students could have earned if they had not returned to school. That difference often shapes the final return more than tuition alone. The question is no longer only whether a degree leads to a job. It is also whether it improves a student’s position compared to the path they leave behind. As more data emerges, that calculation is becoming a more central part of how students choose what to study and whether to study further at all.