Degrees: Separate And Unequal
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There has been a recent spate of articles in the New York Times about the rising cost of college and, relatedly, student indebtedness. A recent graduate in gender studies and religious studies owes $97,000 and can only find work as a photographer's assistant . She is at least doing better than another graduate in photography, who paid $170,000 and now works as an X-ray technician . There are frequent suggestions that college tuition, which has outpaced inflation for the last several decades, is in a bubble.
The New York Times is in its own little bubble, where high-priced liberal arts degrees from private schools are de rigeur. The view of the higher education experience that you apparently can't get from a reporter's Rolodex:
- some degrees pay fantastically better than others
- virtually all undergraduate degrees are worth a public school tuition
- associates degrees are an absolute steal
- post-graduation pay correlates almost inversely with the likelihood your profession is going to be praised in a NYT article
Why Do We Know This?
The owners of this website hired me to figure out which degrees are worth the money. Full disclosure: I have pricey undergraduate degrees in Computer Science and East Asian Studies.
The Bureau of Labor Statistics publishes the results of a salary survey which is the most comprehensive in the country, grouping hundreds of thousands of respondents into 831 occupational classes.
Using the BLS's provided breakdown of the typical level of degree (associate's, bachelor's, master's, etc), we winnowed the field down to 233 jobs where a degree was typically required. For each of the 233 jobs, we asked a large panel of survey respondents to identify specific degrees (e.g. BA in Education, BS in Computer Science) which someone in that job might reasonably have. We associated the occupation with the degree or degrees where there was widespread agreement.
We then created a simple model of a hypothetical career path for someone who worked in a given field for 40 years, starting near the bottom of the surveyed salary data and receiving regular raises until retirement. Finally, we calculated the net present value of these future salaries, which allows one reduce an entire working career into a single dollar figure for making apples-to-apples comparisons between them.
Finally, we put a number on each degree, based on the average NPV of the best paying occupations available to it. You can see the results for individual degrees on the sidebar at left or by using the calculator for yourself.
I'll be the first to admit: this methodology is not nearly as effective as a particular university just polling all graduates for each degree it offers, but until they're ready to commit enrollment suicide for three quarters of their departments, it will have to do. You can compare it to similarly pseudo-scientific rankings like the college rankings in the US News and World Report: not representative of the exact experiences of everyone, but probably sufficient to tell you that there is a difference between #1 and #73.
The first conclusion to fall out of our research is that the common prejudice of computer programmers is, in fact, true: engineers really do make a heck of a lot more money than liberal arts majors.
In general, jobs in IT and jobs in the resource extraction industries (oil, gas, mining, etc) pay the best wages for holders of undergraduate degrees, by a huge margin. It is not uncommon for starting salaries as a computer programmer to be north of $50,000, which is a respectable mid-career salary for a liberal arts student, and the starting salary at firms like Google or Microsoft fluctuates around the six figure mark, which most liberal arts students will never attain without proceeding to professional degrees. (A first-year associate at a large firm with a degree in Law, of course, makes substantially more money.)
The median salary for holders of a degree in Journalism, by comparison, is only $45,000. One could be forgiven for thinking there might be a wee bit of projection going on at the New York Times, where reporters (who earn substantially more than the national median) can scarcely go to Starbucks without bumping into a Physics major doing quant work on Wall Street for high six figures. We'll refrain from speculating what the barista majored in, but whatever it was, he has more reason for complaint than either of the other two.
Surveys from the College Board peg average in-state tuition at in the neighborhood of $6,500 a year. Add in room and board, and most students should be able to get a bachelor's degree for somewhere in the ballpark of $40,000. After taking into account family contributions, part-time jobs, and financial aid, the average student is left with $22,000 in student loans, which result in loan payments of about $3,000 per year on a 10 year plan.
The reality is, this is easily affordable for most graduates. What gets students into trouble is primarily:
- financing personal expenses on credit cards (don't do it!)
- going to overly expensive private schools (where four-year tuitions are rapidly approaching $200,000) and being unwise with major selection)
- going for one of a very limited pool of very poor choices in major.
Your university counselors will probably not tell you, but "all degrees are created equal" is largely a myth. Take a look at right for the difference between the best and worst paying undergraduate degrees. The ones highlighted in red would be difficult to justify from a strictly monetary perspective.
Although not often covered in the august pages of the New York Times, the community college system is one of the major engines of getting marginal students into tertiary degrees. It is a wonderful boon to students unable to go to traditional universities:
- the degrees are screamingly cheap ($5,000 or so on average)
- associate's degrees offer immediate, huge benefits over a high school education
- credit sometimes transfers to 4 year institutions
It isn't an accident that the best returns on investment in education are all associate's degrees.
Granted, they aren't for everyone. Academically prepared students who can afford to pay the opportunity cost of working for four years should probably get a bachelor's degree in a decent-paying field instead. Given how cheap degrees and loans are, there is no reason to forgo the difference in wages between a BA in Computer Engineering ($100,000 or more) and an AA in Physical Therapy ($33,000) just to save on the cost of the degree.
One trope you'll notice if you read a lot of bad fiction is that main characters are disproportionately writers, journalists, and the like. This is probably due to projection: we like and identify with people who are like us. New York Times reporters like and identify with people who are like New York Times reporters. They associate with reporters, editors, teachers, professors, social workers, and psychologists: well-educated white-collar do-gooders who share their worldview, politics, and almost complete unfamiliarity with math above the high school level.
This is perhaps unfortunate, because our cultural elites tell people that they should be more like our cultural elites, and go hundreds of thousands of dollars into debt to get that degree in English so that they can get an unpaid internship at a New York Publishing house, followed by a 10-year stint as an associate editor living in a shoebox, followed (possibly) by career success. That is the normal career trajectory in their circles.
It is highly abnormal in business, engineering, law, medicine, and a host of other fields, which all have different patterns. Engineers make a lot of money, almost straight out of the gate. Doctors and lawyers spend huge amounts of money and time getting advanced degrees, and then get large salaries and stable jobs (though that is changing somewhat for lawyers, due to some oversupply issues below the top of the food chain). Business does not generally pay poorly, to the chagrin of engineers everywhere.
For illustration, we've prepared a graph of degrees which are, broadly speaking, beloved of the cultural elite (blue) with degrees which are not (red).
Honestly, I think there is a shortage of good career advice available to people prior to graduation because the people in charge of giving it (universities) have diametrically opposed incentives compared to their students. Departments accrue funding and status in part based on the number of students they can attract, and getting more grad students frees up professors from actually teaching those students.
The English department is not going to admit that getting a PhD in English means you will be excellently prepared to criticize the biopower inherent in the unemployment line. The university knows that many students are attracted to their "Study what you love! It is worth any price!" sales pitch, so they won't do the (almost free, compared to a new stadium) salary survey telling prospective students the harsh truths about supply and demand in university degrees.
That leaves it up the rest of us. If you know students who are unsure of what they want to do, don't just blindly tell them to do what they love. Tell them to look at the numbers. You can love reading/write books without having to read books professionally, which is probably a good idea, since any idiot can write books (as you will find, to your horror, as an assistant editor working through the slush pile).
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