May 2, 2025
Introduction/Economic Premium as ROI evidence
The value of a University of Minnesota (UMN) baccalaureate degree is multifaceted, encompassing both non-economic benefits—such as higher levels of civic engagement, better health outcomes, and greater career satisfaction—and economic benefits, including financial wellbeing. These diverse outcomes collectively enhance graduates' overall wellbeing and contribute positively to society. This brief focuses specifically on the economic premium of a UMN baccalaureate degree, which is measured by the additional income earned by UMN graduates compared to those with only a high school diploma in the state of Minnesota. The economic premium serves as a key indicator of the return on investment (ROI) of a UMN credential.
Data Sources and Methodology
This analysis draws on data from the University of Minnesota Postcollegiate Outcomes (PCO) project, which tracks graduates from 2006 to 2021. This cohort-based longitudinal study uses institutional data, Minnesota Unemployment Insurance Program data from the Minnesota Statewide Longitudinal Education Data System (SLEDS), and further degree attainment data from the National Student Clearinghouse (NSC). PCO data tracks alumni earnings over time, as well as those who earn additional degrees, enabling the comparison of salaries with those whose highest degree is a baccalaureate degree. This data is benchmarked against state-level data from the Census Bureau, which collects salary data based on highest degree attainment.
Key Findings
- Employment in Minnesota: A significant percentage of UMN baccalaureate graduates work in Minnesota, especially early in their careers. For the 2007 cohort, 76% were employed in the state one year after graduation, decreasing to 56% by the 14th year. This trend is consistent across later cohorts.
- Economic Value: As illustrated in the figure and tables below, the economic value of a UMN baccalaureate degree is evident when comparing median earnings. UMN alumni's median earnings surpass those of high school diploma holders from the second year after graduation onwards.
Conclusion
The substantial economic return on investment of a UMN baccalaureate degree is clear, both in the short and long term. The U.S. Census estimates, which include workers in various career stages, highlight the significant earnings advantage for UMN alumni in these three cohorts who are primarily in their early to mid-career stages.
Comparison of Median Earnings1 by Highest Awarded Credential: UMN System-wide Baccalaureate Degree Holders (Cohorts of 2007, 2011, and 2016) vs. Median Earnings2 of All Minnesota High School Diploma Holders (2010-2021). Note: When a UMN baccalaureate alum receives an additional credential, their salary is excluded from the calculations from that point forward.
| Comparison of Median Earnings1 by the Highest Awarded Credential: UMN System-wide Baccalaureate Degree Holders (Cohorts of 2007, 2011, and 2016). Note: When a UMN baccalaureate alum receives an additional credential, their salary is excluded from the calculations from that point forward. | ||
|---|---|---|
| Group | Median Earnings 1 year out | Median Earnings in 2021 |
| UMN Cohort 2007 | $38,314 | $92,934 |
| UMN Cohort 2011 | $32,354 | $82,626 |
| UMN Cohort 2016 | $38,687 | $67,236 |
| Median Earnings2 of all Minnesota High School Diploma Holders (2010-2021) | ||
|---|---|---|
| Comparison Group | 2010 Census Data | 2021 Census Data |
| All Minnesota High School Diploma Holders | $38,128 | $42,139 |
Notes:
Earnings are based on a calendar year and include full and part-time employment and are inflation-adjusted to reflect 2023 dollars. When a baccalaureate alum receives an additional credential, their salary is excluded from the calculations from that point forward–allowing us to align withCensus methodology for earnings based on highest credential awarded.
High School Earnings Data Source for Minnesota: U.S. Census American Community Survey (ACS) 1-Year Estimates Subject Tables for Minnesota, Table S2001. Earnings have been inflation-adjusted to reflect 2023 dollars. Since the ACS estimates are based on the population 25 years and over, the Minnesota workers include early, mid, and late-career workers, while the UMN alumni represent early to mid-career workers.