August 30, 2010
College Majors, Jobs and Wages
A while back a spiteful little argument erupted on campus between a columnist at the student newspaper and a professor. The student, it seems, referred to the professor’s field as a ‘hobby major.’ The professor responded by calling the student a ‘neo-fascist-capitalist.’ It is the temper of debate only a college or middle school locker room can sustain. Godwin’s law was clearly at work there. However, the question ‘Which majors will perform best in this economy?’ is a good one. It got me thinking about how college preparation translates into employment, and what students and taxpayers need to know.
There’s a public policy dimension to degree choice because taxpayers subsidize college education, through direct payments to students and universities and through subsidized loans. The reasons for doing so are both because education generally benefits society above the benefits an individual receives, and there are direct regional spillovers from a university to the economy. These spillovers come from the effects of science, technology, business education, social sciences and the creative endeavors of those in the humanities. Universities need all of these, but the demand for trained graduates in each field differs. For example, we need more early childhood educators than economists. The only real way to allocate people to the right job is through free choice in markets. Wages are the clearest market signals of demand for particular skills, but student loans make it easy for students to ignore markets until after graduation.
Fortunately, there are studies about income for college graduates by degree. A Department of Labor study reported that of all college graduates, only humanities and ‘special’ majors starting salaries were below the national average for all workers. But within a decade these workers saw more than a doubling of earnings, and more than a quarter finished graduate school. So, even college graduates with degrees in the lowest paying major at graduation were earning, on average, more than $50,000 within a decade. Not a bad hobby.
A second indicator to students isn’t earnings, but in which fields graduates of each major work. The best students will always find work within their fields and many will change jobs because their occupation is less fun than they thought—but students in majors where a high proportion of graduates are working outside their field need to know the risks of this decision. Science, engineering, business and health care graduates have high rates of related jobs. Humanities, history, psychology and the social sciences all have almost two-thirds of graduates working outside their field in 3 years.
So it is clear that markets favor any college degree more than none. There is clearly something very important about the totality of what is learned in college, but, if you want to apply all those upper level classes in your major, you’d better study hard or pick the right field. And by that impertinent youngster was named the top student columnist in the country, but it was only his hobby. He decided to become a well paid capitalist instead.
About the Author
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