Another Question of the Day!
I have been waiting for a resource like this to demonstrate to students how lifetime earnings can vary significantly based on the major they select in college. In other words, not all college degrees are created equally. The Hamilton Project is out with a database showing lifetime earnings for 80 college majors. They have an excellent interactive tool that allows students to select various majors (and types of degrees) and compare lifetime earnings for each of them. It might be fun to have students select 3-4 majors they think they might be interested in and compare the potential outcomes. This will lead to interesting conversations about whether students should follow the money (choose majors with high earning potential) or their passion (career they love but pays less).
Here’s the chart showing lifetime earnings by major (that’s millions of 2014 dollars on the top axis):
Here are the conclusions from their report which I would summarize as: 1) More education leads to more earnings. 2) Students should take into account their future earnings prospects to determine appropriate level of student debt (i.e. Early childhood education majors will have great difficulty managing significant debt loads).
As college students begin another year of classes, few of them have good knowledge of what their earnings for their chosen field of study are likely to be. The good news is that no matter what their major, they are likely to earn more over their careers than those with less education. College degrees may not be a guarantee of higher income, but they come closer than just about any other investment one can make.
Importantly, the higher earnings associated with obtaining a bachelor’s degree, even in low-earning fields in the humanities and education, stand up when accounting for the risks of unemployment and underemployment. The earnings presented here incorporate the weak labor market during and after the Great Recession and include all workers, not just those with full-time jobs. Even college graduates who begin their careers in a recession with a relatively low-earning major will still earn more over their lifetimes than individuals with just a high school diploma. To further explore career earnings by major, visit The Hamilton Project’s interactive analysis, where the user can choose different majors and education levels, and compare earnings.
All of this being said, future earnings should not be the only factor that students weigh when determining what it is they want to study. It is, however, a significant factor, particularly as student debt burdens grow larger. To further promote thinking around this issue, The Hamilton Project will soon be releasing the second and third parts of this series on major decisions and lifetime earnings. The second part will explore earnings growth over the career, and the third will include an interactive calculator that shows the share of earnings—for each of the 80 majors studied here—that are needed to repay student debt in early career. Our goal is to provide additional information that can help consumers—students and their families—make the best decisions regarding their higher-education investments.