Which industry has the highest paying jobs?
Simple question. Hard to answer.
Until recently, good data wasn’t available: tax returns weren’t consistently categorised by job type until 2005.
Many rankings of the highest-paying jobs are based on job seeker surveys from GlassDoor, and this almost entirely misses the highest-earning people.
Other rankings, such as this one by US News, use median earnings rather than the mean, making them uninformative for industries with a wide spread of earnings.
The government’s Bureau of Labor Statistics (BLS) is much better, but it still doesn’t properly sample the highest-earning people.
But we’ve got hold of a forthcoming paper by three economists, Benjamin Lockwood (UPenn), Charles Nathanson (Northwestern University) and Glen Weyl (Yale) that combines the BLS figures with new tax data to accurately estimate the whole income distribution of the 11 highest-earning professions.1 This is the best ranking we’re currently aware of.
In this article, we explore this data, and how it could be used to estimate the expected lifetime income of different professions. We’ll be using this data to update our career reviews and identify the best options for people who want to donate more to charity by earning to give. Money doesn’t make you happy, but it can help you have a positive impact.
List of the highest-paying jobs
|Profession||Mean income in 2005 (estimated)||Median Income||99th Percentile Income||Population Share|
|Engineering & programming||$98,400||$73,000||$452,000||2.0%|
|Operations & consulting||$74,000||$51,000||$368,000||2.4%|
|Art, sport & entertainment||$72,000||$40,000||$497,000||1.0%|
|All other jobs||$33,717||$26,000||$111,000||82.0%|
Note that all income is pre-tax in 2005. Average wages have risen about 30% since then in nominal terms.6
Medicine comes out top. Half of doctors in the US earn over $200,000 per year, and the mean is actually higher than finance and law.
That said, the very highest-earning people are in finance and law. The top 1% in finance earn over $2m per year. Since finance makes up 0.9% of the workforce of 160 million, that’s well over 10,000 people.
And, because there are 8-times as many managers as doctors, the majority of the highest-earning people are managers.
Earnings are most unequally distributed in finance and real estate. The top 1% in real estate earn 27 times as much as the median.
People in art, sport and entertainment have the lowest median, lower than teachers, but the most successful earn over $500,000.
It’s also possible to get rich as an engineer or salesperson, and as we’ll show later, a pilot or blue collar worker.
Below we cover some details of the analysis, and how to predict lifetime income in different jobs.
Which jobs are included in the table?
Collectively, the 11 professions in the table above (excluding “Other”) account for 18% of jobs and 42% of income. They cover about 60% of people earning over $100,000 and over 90% of those earning above $300,000.4
Here’s how the professions were defined (the links go to our most relevant profiles where you can get more information):
- Art (artists, entertainers, writers, and athletes)
- Engineering (computer programmers and engineers)
- Finance (financial managers, financial analysts, financial advisers, and securities traders),
- Law (lawyers and judges)
- Management (executives and managers) (unfortunately this includes managers across many sectors)
- Medicine (doctors and dentists)
- Operations (consultants and IT professionals)
- Real Estate (brokers, property managers and appraisers)
- Research (professors and scientists)
- Sales (sales representatives and advertising and insurance agents)
- Teaching (primary and secondary school teachers)
One problem is that the categories combine some pretty different roles. For instance, one reason why there’s so much skew in real estate is probably just because it includes appraisers, who earn about $50,000, as well as wealthy people who own hundreds of properties.
How do the highest-earning people make their money?
Here’s the fraction of each profession at each income level.
This means that of those earning about $10,000 per year in the professions listed above, 50% work in art (the “starving artists”), and most of the rest work in sales and teaching.
Those earning $300,000 per year mostly work in management, law, finance, and medicine.
Those earning over $10m per year mostly work in management and finance, though there are significant numbers in sales, real estate, operations, medicine, law, engineering and art at this level.
In fact, art has a bulge both at the bottom and at the very highest level of earnings – the celebrities.
You can see the odd kinks in the chart indicate some gaps and inconsistencies in the data, and it should be stressed that this is still a rough analysis.
Which high-paying jobs are missing? How to make it into the top 1% as a blue collar worker.
The professions listed above account for about 90% of the earnings of the highest-earning people.4 Who earns the other 10%?
The main paper used data from Bajika et al to estimate the incomes of the top 1%, who earned over $280,000 in 2005.2 The rest of the top 1% by income in the US, if they were working at all, had the following jobs (from most to least common):
- Blue collar.
- Entrepreneur (not elsewhere defined).
- Government and social services.
- Farmers and ranchers.
It’s interesting you can make it into the top 1% as a pilot, farmer or blue collar worker. In fact, the average pilot makes about $150,000 per year. The top 10% of police supervisors earn over $130,000, the top 10% of construction supervisors earn over $100,000, and there are other blue collars jobs many earn over $100,000. The farmers who make it into the top 1% will be farm-owners rather than farm-workers.
Entrepreneurs might be the most interesting category for our audience, though most of them will already be included in the other categories. In Bakija at al’s data, they make up 2.95% of the top 1%, similar to the proportion of lawyers.2 However, they receive 40% of the income share of lawyers, suggesting their average earnings are 40% those of law. Since so many different roles can be counted as “entrepreneurship” – from small business owners to VC-funded tech founders – this doesn’t tell us much. It could also be that the highest-earning entrepreneurs are counted as managers or something else. Read more about entrepreneur earnings.
What about narrower categories of job?
If we picked narrower categories, medicine would be knocked off the top.
Goldman Sachs has over 33,000 employees who earn on average over $300,000 per year,8 and it’s similar at other investment banks. But this includes secretaries. If we only looked at the true “front office” staff, then the average would be significantly higher. The average front office banker in the UK who stays in the job past 35 likely earns over $500,000.9
We’ve also roughly estimated that hedge fund traders might earn a mean of $400-$900k. This would make “hedge fund trader” and “investment banking” the top of the table.
This, however, is an unfair comparison. While few people leave medicine, it’s very common to leave investment banking and trading due to the “up or out” promotion system.