How well will your degree program pay off in the professional world? Mihaylo Economics Assistant Professor Nick Huntington-Klein has coauthored a study examining the relationship between college majors and wages.
A university education has many benefits, including personal development, the opportunity to meet people of diverse backgrounds and cultures, and the chance to live your purpose. But for many college freshmen and prospective graduate students, the foremost goal in their education is to have a lucrative and rewarding post-education career.
According to the Bureau of Labor Statistics (BLS), in 2014, the average weekly wage for workers with a bachelor’s degree was $1,101, while the average wage for those with advanced degrees was $1,386, compared to $668 for those with only a high school education. But not all degree programs are equal in their ability to boost student income potential.
“There are large known differences in average earnings of students who graduate from different majors,” Mihaylo Economics Assistant Professor Nick Huntington-Klein says. “These differences can be as large as the difference between graduating with a bachelor’s degree as opposed to not going to college at all. For example, right out of college, the average engineering graduate earns about twice what the average history graduate earns.”
In a 2015 study Huntington-Klein coauthored, he examined whether students are more likely to choose majors that correspond with higher wage potential. This, in turn, impacts the degree programs offered by the nation’s colleges and universities.
“We track the wages associated with particular occupations over time, as well as the number of bachelor’s degrees completed in those majors, to see if changes in wages are followed by commensurate changes in college attainment,” he explains. “We do find some relationship. About three years after wages change, there is a response in the number of people graduating with the affected degrees. But this response is relatively small. For an average major, an increase in that field’s wages of 10% relative to the earnings of other major fields would lead the share of degrees completed in that major to increase from 2.07% to 2.21%.”
Huntington-Klein notes that students tend to take local wage data, rather than national data, into account when considering majors. “Students tend to hear about the wages of people they know or those in their program rather than look at national wage statistics,” he says. “Many students are likely to work in the local area where they went to college, especially if they are attending college near where they grew up. For these students, local labor market trends are the most relevant. But responding largely to local trends also means they might be ill-equipped to deal with the national labor market. Choosing a major that’s doing well locally but not nationally limits one’s ability to move, whether soon after college or later in life. A national decline in wages for occupations linked with a particular major might also impact a local area later, leading to a career that is not as lucrative as expected.”
While income potential is important, Huntington-Klein cautions students to not let it be the sole determinant of their programs. “I am not going to tell students to only choose majors that are going to earn a lot of money,” he says. “Different people have different skills and preferences, and there is no way everyone is going to be an engineer.”
Still, he suggests that students research degree program wage potential through online sources such as the U.S. Census American Community Survey, Georgetown University’s Center on Education and the Workforce, the BLS Occupational Outlook Handbook or Payscale.com.
“Before settling on a major, do not skip the step of understanding the earnings consequences of your choice,” he says. “The research will take an afternoon at most but could translate into hundreds of thousands of dollars over the course of your lifetime.”
For more on career opportunities, visit Mihaylo Career Services at SGMH 1409, or contact them at 657-278-8738 or MihayloCareers@fullerton.edu