How Much Are Good Grades Actually Worth?

If your parents paid you for good grades when you were a child (or if you’ve doled out cash to encourage academic achievement), you know what good grades are worth. But, it turns out, people who make good grades in school tend to make more money in their careers (when adjusted for education level and field of study). So, even if you go no further than high school, you’re financially better off for having made A’s and B’s, says Greg Emmerich, the researcher who crunched the numbers.

The differences grow with associate, bachelor’s and master’s degrees, and even doctorates (within the same field of study). But in every case, the median salary is higher for someone with more education, and higher grades appear to be a predictor of earning thousands of dollars more per year in salary.

However, grades and educational level are just part of the story. Field of study is also crucial — so much so that you could be in the A-B grade range in one field, but earn less than C students in another. Let’s say you graduate near the top of your class with a bachelor’s degree in literature. You can expect a median salary a bit above $29,000. But your friend who was a slacker in the School of Engineering will get more than $52,000 for her C effort (and yes, she’s being penalized — higher grades could’ve gotten her to a little over $71,000.) And if you find your literature-major salary depressing, just be glad you studied. Your peers who got lower grades are likely making about $17,000 a year.

So studying pays, but picking a high-paying major can make an even bigger difference.

Emmerich said he was intrigued by the idea that one’s education level could so heavily influence lifetime earnings. He said his girlfriend teaches teens at risk of not finishing high school, and he was impressed that a high school diploma made such a huge difference in earnings (though still relatively low, the difference is significant).

Muddling through high school with C’s doesn’t doom you to a lifetime of mediocre earnings. What counts most are your most recent grades. So, Emmerich said, you could make mediocre grades in high school, then go to technical school and later transfer to a university. If you’ve gotten your act together and started studying and earning higher grades, the earlier ones won’t hurt you. Recent performance has the most impact. (They are like credit scores in that way; making mistakes with credit early can cost you points in your credit scores, but as you improve — with on-time payments, using a small portion of credit available and generally demonstrating that you handle credit well — those missteps have less impact. And, with credit, they eventually disappear from your credit report altogether.)

Emmerich hopes research like his becomes common knowledge among high school counselors and students choosing a major. Because while, “I’d hate to say don’t follow your passion,” he says, if a student is trying to decide between two, information about expected earnings could be a factor. You wouldn’t want to make any other investment without an idea of what to expect in terms of performance. Choosing a major is like that — and no matter which one you choose — good grades correlate with more money.