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What are Synthetic Work-life Earnings?
Synthetic Work-life Earnings are a way of looking at how small differences in earnings can add up to big differences over an extended period of time. For example making $12 per hour more adds up to $480 per week or $25,000 per year or $1,000,000 in a 40-year work-life. While this way of looking at earnings is very useful one should note that these estimates are based on many assumptions, discussed below, and they should be used for illustration purposes rather than an exact projection of a persons earnings.
How are Synthetic Work-life Earnings Calculated?
We start by using data from the American Community Survey (ACS). A single year of data collection in the ACS has about 4.5 million respondents so the sample is large enough to look at very small groups of people.
These are the general steps:
Example: 25-29 year-olds with a Master’s degree, who majored in Communications for the bachelor’s degree, and who work as elementary school teachers.
Why aren’t all occupations shown?
Many of the most common occupations for a field of degree are displayed, provided a Synthetic Work-life Estimate could be calculated that met certain conditions:
The coefficient of variation is calculated using the following Equation.
Assumptions and Limitations