Best-Paying Cities for Recent College Grads

00 Young businessman-TTHNN6
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__By Lauren Bringle, AFC® __

As college education costs climb higher, landing a well-paying job after graduation is even more important than ever before. Over half of young adults who attended college incurred some debt, with typical levels of student loans in the range of $20,000 to $25,000 post graduation. According to the latest data from the Bureau of Labor Statistics (BLS), median earnings for recent college graduates working full-time is approximately $50,000 per year. However, the number varies widely by city, college major, and occupation, among other factors.

The good news is that while the median wage for recent graduates (adjusted for inflation) has fluctuated over the last several decades, the number hit a new peak last year, climbing by nearly $4,500 from 2019 to 2020. What’s concerning is that the $50,000 annual wage figure for 2020 is from survey data collected in March of last year, so it does not adequately reflect the impact of the COVID-19 pandemic. College graduates seeking employment last spring faced the worst job market since the Great Depression, and it remains to be seen how wages will be affected in the coming years.

Chart1 Prior to COVID, median earnings for recent grads reached record highs

Attaining a bachelor’s degree boosts earning potential by a large margin—median annual earnings of recent college graduates is about $20,000 more than workers of the same age with only a high school diploma. However, some fields of study pay off much more than others. The highest-paying majors for recent college graduates are computer science and several types of engineering degrees, such as chemical, computer, and electrical. Median earnings for recent graduates within these majors is $70,000 per year, or about 40 percent higher than the typical graduate.

Chart2 CompSci and Engineering are most lucrative majors for recent grads

While academic major is one of the strongest predictors of earnings post graduation, so too is location. Additionally, large differences in cost of living across locations affect how comfortable it is to live on a given wage and how easy it is to pay off loans. At the state level, recent graduates working full-time in North Dakota and Montana have the highest median earnings after adjusting for cost of living, at $53,751 and $51,337, respectively. Despite being one of the lowest-cost states to live in, New Mexico also reports the lowest cost-of-living adjusted median wage for full-time recent graduates, at just $36,224 per year.


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Chart3 Recent grads in ND earn the most after adjusting for cost of living

To find the best-paying metropolitan areas for recent college graduates, researchers at Self analyzed the latest earnings data from the U.S. Census Bureau and cost of living data from the U.S. Bureau of Economic Analysis. The researchers ranked metro areas according to the cost-of-living adjusted median earnings for full-time working college graduates aged 22 to 27 with a bachelor's degree only. Researchers also calculated the unadjusted median earnings for recent graduates and the recent college graduate proportion of the population. Only the 50 largest metropolitan areas were included in the analysis.

Here are the best-paying U.S. metros for recent college graduates.

The 15 Best-Paying Metros for Recent College Grads

15 Ohio Cincinnati-KH4JPC
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15. Cincinnati, OH-KY-IN

  • Median earnings for recent college grads (adjusted): $48,565
  • Median earnings for recent college grads (actual): $44,000
  • Recent college grad proportion of the total population: 2.4%
  • Cost of living: 9.4% below average
14 Minnesota Minneapolis-J73XBX
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14. Minneapolis-St. Paul-Bloomington, MN-WI

  • Median earnings for recent college grads (adjusted): $48,591
  • Median earnings for recent college grads (actual): $50,000
  • Recent college grad proportion of the total population: 3.0%
  • Cost of living: 2.9% above average
13 Illinois Chicago-RANCJY
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13. Chicago-Naperville-Elgin, IL-IN-WI

  • Median earnings for recent college grads (adjusted): $48,638
  • Median earnings for recent college grads (actual): $50,000
  • Recent college grad proportion of the total population: 2.8%
  • Cost of living: 2.8% above average

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12 Rhode Island Providence-TDPP8R
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12. Providence-Warwick, RI-MA

  • Median earnings for recent college grads (adjusted): $48,853
  • Median earnings for recent college grads (actual): $49,000
  • Recent college grad proportion of the total population: 2.5%
  • Cost of living: 0.3% above average
11 Texas Houston-2CB6YDW
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11. Houston-The Woodlands-Sugar Land, TX

  • Median earnings for recent college grads (adjusted): $49,164
  • Median earnings for recent college grads (actual): $50,000
  • Recent college grad proportion of the total population: 1.9%
  • Cost of living: 1.7% above average
10 Texas Austin state capitol-FY6J89
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10. Austin-Round Rock, TX

  • Median earnings for recent college grads (adjusted): $49,345
  • Median earnings for recent college grads (actual): $49,000
  • Recent college grad proportion of the total population: 3.2%
  • Cost of living: 0.7% below average
09 Texas Dallas-M8PAR1
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9. Dallas-Fort Worth-Arlington, TX

  • Median earnings for recent college grads (adjusted): $49,407
  • Median earnings for recent college grads (actual): $50,000
  • Recent college grad proportion of the total population: 2.3%
  • Cost of living: 1.2% above average
08 Ohio Columbus KH4JT5
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8. Columbus, OH

  • Median earnings for recent college grads (adjusted): $51,856
  • Median earnings for recent college grads (actual): $47,500
  • Recent college grad proportion of the total population: 2.7%
  • Cost of living: 8.4% below average
07 California San Francisco-D9XX89
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7. San Francisco-Oakland-Hayward, CA

  • Median earnings for recent college grads (adjusted): $52,045
  • Median earnings for recent college grads (actual): $70,000
  • Recent college grad proportion of the total population: 3.4%
  • Cost of living: 34.5% above average
06 Ohio Cleveland-PWACRD
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6. Cleveland-Elyria, OH

  • Median earnings for recent college grads (adjusted): $52,280
  • Median earnings for recent college grads (actual): $47,000
  • Recent college grad proportion of the total population: 2.1%
  • Cost of living: 10.1% below average
05 Michigan Detroit-MB2JPM
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5. Detroit-Warren-Dearborn, MI

  • Median earnings for recent college grads (adjusted): $52,466
  • Median earnings for recent college grads (actual): $50,000
  • Recent college grad proportion of the total population: 2.1%
  • Cost of living: 4.7% below average
04 Pennsylvania Pittsburgh-KCH540
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4. Pittsburgh, PA

  • Median earnings for recent college grads (adjusted): $52,706
  • Median earnings for recent college grads (actual): $48,700
  • Recent college grad proportion of the total population: 2.8%
  • Cost of living: 7.6% below average
03 Missouri Kansas City-PTNJGN
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3. Kansas City, MO-KS

  • Median earnings for recent college grads (adjusted): $52,802
  • Median earnings for recent college grads (actual): $49,000
  • Recent college grad proportion of the total population: 2.3%
  • Cost of living: 7.2% below average
02 Missouri Saint Louis-R162EH
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2. St. Louis, MO-IL

  • Median earnings for recent college grads (adjusted): $53,274
  • Median earnings for recent college grads (actual): $48,000
  • Recent college grad proportion of the total population: 2.1%
  • Cost of living: 9.9% below average

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01 California San Jose-2AGFDKN
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1. San Jose-Sunnyvale-Santa Clara, CA

  • Median earnings for recent college grads (adjusted): $56,827
  • Median earnings for recent college grads (actual): $72,000
  • Recent college grad proportion of the total population: 3.3%
  • Cost of living: 26.7% above average

Detailed Findings & Methodology

The best-paying metros for recent college graduates are a mix of higher-cost tech hubs and more affordable cities in the Midwest and Northeast. The best-paying metro for these young professionals—San Jose—is one of the most expensive areas in the country, but college graduates earn enough there to make up for the high cost of living. Young degree holders in the St. Louis metro area earn $48,000 at the median, but living in St. Louis is so affordable that their cost-of-living adjusted median wage ($53,274) is nearly as high as that of their counterparts in San Jose.

Nationally, recent college graduates aged 22 to 27 make up 2.1 percent of the population, but some of the best-paying metros attract larger numbers. Recent graduates in the San Jose, San Francisco, and Austin metro areas account for more than 3 percent of the local population, about one-third higher than the national level.

To find the best-paying metros for recent college graduates, researchers at Self analyzed data from the U.S. Census Bureau’s 2019 American Community Survey Public Use Microdata Sample (ACS PUMS) and the Bureau of Economic Analysis’s 2019 Regional Price Parity (RPP) dataset. Statistics on median earnings were derived from the ACS PUMS, and the cost-of-living index was derived from the RPP data.

To make earnings comparable across locations, earnings in expensive metros were adjusted down to reflect lower purchasing power while earnings in relatively affordable metros were adjusted up to reflect higher purchasing power.

Metro areas were then ranked by the cost-of-living adjusted median earnings for recent college graduates. Recent college graduates were defined as those aged 22 to 27 with a bachelor's degree only, working full-time (not in school). Only the 50 largest metropolitan areas were included in the analysis.

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Written on March 9, 2021
Self is a venture-backed startup that helps people build credit and savings. Comments? Questions? Send us a note at hello@self.inc.

Disclaimer: Self is not providing financial advice. The content presented does not reflect the view of the Issuing Banks and is presented for general education and informational purposes only. Please consult with a qualified professional for financial advice.

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