What is the value of a master’s degree? The field of economics and the business sector tell us that the value of any commodity or service is what people are willing to pay for it.

Companies clearly place a premium on employees with a master’s degree. Why do companies invest in the education of their workers?  Professional advancement is important to every working sector. Employees who continuously update their skills are more satisfied with their work and contribute more to our collective success. And that is pretty much it in a nutshell. Successful companies want good employees. Employees that are better prepared contribute to the bottom line. And companies are willing to invest capital to make more capital.

Graduate study calls on a student to move beyond being a consumer of information to become a producer of information. Through advanced study in a discipline, and under the tutelage of qualified faculty, a graduate student learns to apply knowledge to create new knowledge. The goal for graduate students is to contribute to the body of knowledge in their field. That contribution may be global in reach, such as a traditional report of original research, or it may be local, such as helping your organization improve on practice or product. That is not to say that only people with graduate degrees can improve practice or product. But it is to say that graduate study in your field exists for that very purpose.

So what about education? In education, graduate degrees prepare teachers to contribute to the body of knowledge in their fields, both globally and locally. Educators may seek a graduate degree to change career directions, such as becoming a principal or a curriculum coach, or they may seek a graduate degree to become better at what they do. However there is another reason people in education seek master’s degrees: the master’s bump.

The master’s bump is an automatic pay raise for teachers who earn a master’s degree. Most states historically have offered that raise. North Carolina recently stopped paying teachers for master’s degrees. And other states are cutting back on the practice severely. Tennessee, Indiana, Louisiana and New Jersey are all states that have either cut the master’s pay bump, or have adopted policies that provide raises only for certain kinds of content specific master’s degrees, as in mathematics or the sciences, and not for master’s degrees in education. The reasons for this are, like most issues in education, complicated. One reason is an increased focus on test scores. State officials want to pay for performance, not credentials. But probably the most significant reason is money. During the great recession of 2007, tax revenues dropped precipitously, and states, feeling the crunch, cut budgets everywhere. Many public employees saw not only pay freezes, but pay cuts as states tried to figure out how to offer vital services with significantly less money. State legislatures with a political predisposition towards spending less government money looked carefully at expenditures, and the master’s bump suddenly received a lot of scrutiny.

There is empirical evidence that a teacher with a master’s degree has a positive impact on student performance. The high quality master’s programs do provide appropriate professional development that benefits not just the teacher, but their students as well.