TheJobsMarket
Pay by Experience and Level

The Years-of-Experience Premium, Measured

Everybody quotes a number for what another year is worth. Almost nobody says where it came from, and the honest answer is that published wage data does not contain it.

Short answer

Wage surveys do not break figures out by years of experience, so any precise claim about what an additional year is worth is an inference rather than a measurement. What can be said is the shape: proportional gains are largest in the first several years, flatten in the middle, and the total spread attributable to experience alone is much smaller than an occupation's full percentile range.

The honest starting point: it is not published

The national wage survey carries no years-of-experience breakdown. It is an establishment survey — employers report what they pay for positions, not the tenure of the people in them. So there is no official figure for what five years is worth.

Any site presenting a clean experience curve is either using private survey data with a smaller sample and proprietary method, or inferring it. Both can be useful; neither is the same as measured national data, and it is worth knowing which you are looking at.

The proxy that does exist

The percentile spread. In a typical occupation the tenth percentile sits at about 68 per cent of the median, and the ninetieth is roughly 2.22 times the tenth.

Experience is one of several things separating those points — alongside geography, employer type and specialization. So the spread is an upper bound on what experience is worth, not a measure of it, and reading it as a pure tenure curve overstates the case.

What the data does say about experience

The projections carry a work-experience field for entry, and the distribution is striking. Of 832 occupations, 716 require no prior related experience to enter. 88 require less than five years. Only 28 require five years or more.

Those 28 are almost entirely management: chief executives at $213,990, computer and information systems managers at $175,140, architectural and engineering managers at $171,270, financial managers at $166,570.

What that pattern actually means

Experience is rarely a gate for entering an occupation. It is a gate for entering the management layer above it — and that layer is where the large step changes in pay sit.

So the honest model is not a smooth curve rewarding each year. It is a flat-ish stretch inside an occupation, then a step when you cross into a role that required those years as a precondition.

Why the curve is steepest early

The distance from the tenth percentile to the median is usually larger than from the median to the seventy-fifth. Early years move you fastest because you start below the level the work commands, and catching up to the market rate is quicker than exceeding it.

After that, movement depends on things that are not time — scope, specialization, employer. Which is why people who expect the early pace to continue are reliably disappointed around year seven.

Where experience is worth the most

In wide occupations. Personal financial advisors run 7.11 times from tenth to ninetieth; physicians and chief executives above six. There, the distance between an early-career and an established person is enormous and largely earned inside the job.

In narrow ones it is worth very little. Farmworkers run 1.39 times and tellers 1.45. Ten years in those occupations buys a modest premium because the work is standardized, and the way up is a different occupation.

Estimating it for yourself

Take the published spread for your occupation in your metro. Subtract what you can attribute to geography by comparing metros, and what you can attribute to employer type by comparing advertised ranges across industries.

What is left is the plausible experience effect. It is an estimate rather than a measurement, and doing it explicitly is far better than accepting somebody’s clean curve without knowing what produced it.

The better source for an actual answer

Advertised ranges in states with pay transparency requirements. Compare a posting asking for one to two years against one asking for five to seven, in the same metro, for the same work.

That difference is current, local, and specific to your occupation. It is the closest thing to a measured experience premium available to you, and it is free.

Common questions

How much is a year of experience worth?

Published wage data does not contain the answer. Any precise percentage is an inference, usually from self-reported data with a particular audience, rather than a measurement of the population.

Why can I not just use the percentile range?

Because that range is produced by industry, employer size, location and specialization as well as experience. Attributing all of it to tenure is the most common way the premium gets exaggerated.

What can be said with confidence?

The shape: proportional gains are largest early, flatten in the middle, and the flattening reflects both diminishing returns and how internal raises are calculated. Shape, not magnitude.

What should I argue from instead?

The published band for your occupation and area, and where in it you sit. It is checkable, which is exactly what makes it stronger in a negotiation.

Are the salary-site experience curves useless?

Not useless, but they describe whoever answered that site's survey. Treat them as directional for the shape and not as a measurement of what your employer should pay.

Is there official data on what experience is worth?

No. The national wage survey is an establishment survey with no tenure breakdown, so there is no published years-of-experience curve.

How many occupations require experience to enter?

Of 832, only 28 require five years or more — almost all management — while 716 require none at all.

What is the best available substitute?

Advertised ranges in pay transparency states. Compare a posting asking for one to two years against one asking for five to seven, same metro, same work.

CS

Charles Slocs

Data and research

Charles Slocs builds the data side of this site — pulling the federal wage and employment series, matching job titles to occupation codes, and working out what the numbers do and do not support. He writes the pages that are mostly a question about evidence: what a survey measured, how wide the spread really is, and which published figure is out of date.

All articles by Charles Slocs →