College students are encouraged to pursue their interests ranging from aerospace engineering to theology. However, these decisions can have a profound impact on their job opportunities and career income, as some graduates enjoy much higher incomes than others, according to the Federal Reserve Bank of New York.
It’s no surprise that the top-earning college majors are in what are known as STEM subjects, or degrees in science, technology, engineering, and math. Data shows that the lowest-paid college majors are found in fields such as theology, social services, performing arts, education, and leisure and hospitality.
Some workers with majors that correlate with higher wages could potentially outperform their classmates by hundreds of thousands of dollars in the two decades after graduation — an issue that could affect some students’ decisions about their studies. Enrollment has fallen in some low-earning majors, such as education, where the number of bachelor’s degrees has fallen 19% since 2000-01, according to the Pew Research Center.
“There’s just a very big difference in job outcomes depending on your major,” Richard Deitz, an economist at the New York Fed, told CBS MoneyWatch. “The data can be extremely valuable in helping people make decisions about what to study.”
Of course, pushing a teenager to study engineering if they want to be a teacher is no guarantee of financial success and can even have the opposite effect. For example, an engineering graduate might have a potentially valuable degree but struggle professionally if they lack the aptitude for the demands of the job, or simply be a recipe for misery.
“It can lead students to make decisions that aren’t right for them or to move into majors in which they may not be successful,” Deitz said.
Instead, the data could be used to help a college student interested in math decide between one of several math areas, or an educated student make a similar choice.
Fields where income can grow
Even though new graduates start their careers with earnings disparities by major — from a low of $36,000 per year for theology majors to $75,000 for chemical engineering majors — some areas potentially offer much more mid-career earnings growth (when employees are 35 to 45 years old), the NY Fed analysis found.
For example, industrial engineers and chemical engineers start their careers with similar median annual earnings — $70,000 and $75,000, respectively. But by mid-career, the chemical engineering major will have an average salary of $120,000 — $20,000 more per year than an industrial engineer.
In contrast, some majors often experience very little growth in earnings as graduates reach their middle career years, such as
Is a college degree worth it?
College enrollment has declined during the pandemic, with experts citing the impact of the health crisis as well as rising skepticism about whether a college degree is worth the cost.
Overall, college graduates earn people with just a high school diploma — but that’s not true for everyone, economists note. For example, some college graduates at the lower end of the spectrum may earn about the same as their non-college classmates.
Given the high cost of college, including the burden of student loans, the question is whether college is for everyone. Still, college graduates tend to have a lower unemployment rate than those with only a college degree, with the January unemployment rate standing at 2% for college graduates versus 3.7% for those with only a college degree.
The proportion of “underemployed” college graduates — or those working in jobs that don’t require a college degree — adds nuance to analyzing the value of a degree.
In particular, some low-paying jobs have low underemployment rates, such as B. in education. In other words, graduates with a teaching degree are almost certain to find a job in education, with the underemployment rate in elementary school subjects being 15%, according to the analysis.
But 64% of performing arts majors are underemployed, a sign they may have more difficulty gaining a foothold in their chosen field.