Study on Majors Misses the Big Picture

Strategic Insights Blog | January 7, 2015

Lately, there has been a lot of debate and research on the earnings of various majors. Thus far, the only reliable conclusion that could be made is that engineers make good starting salaries. Nevertheless, many think tanks and op-eds treat this data as a referendum on the liberal arts.

The latest study along these lines comes from the Education Policy Center at American Institutes for Research. The paper, “Why your Degree Matters: College Degrees and Long-Term Payoffs,” seeks to debunk a popular myth: that liberal arts majors eventually catch up with STEM majors over time in regards to earnings. Author Mark Schneider frames the motivation for this study right at the outset:

"Along with providing more students with access to higher education, measuring student outcomes ranks near the top of the Obama administration’s education policy priorities. One outcome — how much graduates earn when they enter the labor market — has become a hot-button issue as student debt mounts and fewer new graduates get jobs with the wages needed to pay off their loans. Meanwhile, many state policymakers want to measure the return on taxpayers’ investment in higher education — one of the biggest and most important investments states make. And many in academe claim that the liberal arts will be abandoned if the returns on studying them pale when compared with the salaries other majors command in the job market."

Schneider goes on to show that in states with officially published wage data on specific majors — Virginia, Texas, Arkansas, Colorado, Tennessee and Florida — the average starting salary of a technical associates degree holder is higher than that of bachelor's degree holders in every state but Arkansas, and the starting salaries of graduates with bachelor's degrees with an engineering focus are significantly higher. Schneider then states that non-STEM bachelor's degrees do not catch up over time with STEM graduates by showing ten year salary data from the only state that publishes it — Texas.

In an unsurprising development, Schneider’s table shows that even ten years down the line, petroleum, mechanical, chemical and naval engineers still make more money than anthropology, film and drama majors. Of course, there are a few caveats regarding these findings:

  • Wage data is only tracked in Texas, and the job market of oil-rich Texas is overwhelmingly favorable to chemical and petroleum engineers
  • The wage growth of “impractical” liberal arts majors, such as drama and film, was still over 100 percent during this ten-year span
  • Drama and film majors — typically the worst performing of all liberal arts majors, in terms of salary — still have salaries at or above the median income of $46,900 for an individual in that age group

Furthermore, should it logically follow that the existence of higher paying majors necessarily means we should downsize lower paying ones? Not if we already know that there is limited evidence for the supposed STEM shortage. In fact, with the price of oil plummeting, engineers are now facing threats of mass layoffs. It’s also highly unlikely we can collectively turn drama and anthropology majors into advanced engineering majors, and it’s doubtful that institutions with a liberal arts focus can take any useful conclusions from these wage data; they are most likely competing for completely different sets of students than the ones who would consider engineering or other STEM fields. Schneider anticipates this objection, however:

"As all of these efforts go forward, we can expect pushback from the higher education establishment. The complaints will take many forms. Among the most common will be that higher education is about so much more than monetary outcomes, that there is great variation in the mission of the schools and programs, that emphasizing earnings will discourage schools from offering programs that feed into low-paying professions that have high social value, and that the time frame of the measurement is wrong."

Schneider goes on to argue that despite these objections, students should “absolutely” know how much they will be likely to earn before they make decisions on about how much to borrow because 90 percent of students surveyed in a recent Higher Education Research Institute stated that one of the prime reasons for pursuing higher education was to get a better job. But this counterpoint does not really consider that a “better job” might not necessarily be measured purely in wages. Yes, Schneider mentions social work as something with high social value but low pay that institutions should encourage, but it goes much deeper than that: A drama major working in a communications or development office at a major theater might not make much more than what they could make waiting tables, but it might be much more satisfying on a personal level, and there is a much larger ceiling for this career path beyond the initial ten years.

Finally, Schneider’s argument doesn’t really address the objection that there is indeed a great variation in the mission of schools. In fact, in the introduction of the paper, Schneider states that wage data will only affect state schools and how they are funded, but the subsequent content includes a lot of veiled shots at liberal arts schools. It’s confusing exactly what this paper is trying to say: should liberal arts schools question their mission, or should state schools in general rearrange their programs to produce higher wage graduates? There is little evidence that liberal arts-focused schools need to change their curricular mission even beyond the immediate problem identified in this paper based on the 10-year wage data for Texas. Yes; liberal arts majors may earn less than highly skilled engineers, but as of now there is no evidence that liberal arts majors are defaulting on debt at any greater rate; they simply pay more of a percentage of their income over time.

The conclusion we can take from this paper is the same that we can take from a lot of others based in simple wage data: being an engineer is a good gig. If you have highly developed math skills and a passion for it, it’s a good choice. Otherwise, institutions should continue to focus on staying true to the mission that attracts their core constituency, and not get wrapped up in wage data and employment numbers as the definition of the value of degrees.


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