Wednesday, May 30, 2012

More on the Outcomes of College Majors

In my previous blog, I cited a research study that found many college students expressing the view that they would be achieving greater success if they had chosen a different college major. I have found much reason to agree with them. The research that I did for the third edition of the College Majors Handbook with Real Career Paths and Payoffs: The Actual Jobs, Earnings, and Trends for Graduates of 50 College Majors showed me that graduates of certain majors achieve much higher rates of pay, employment, and satisfaction than graduates of other majors.

If you want to see the variations among individual majors, you’ll need to examine the book, because I can’t cover all 58 majors in a blog. (Yes, despite the subtitle, the book actually covers 58 majors.) However, I can summarize some of my findings here by dividing the majors into the 7 divisions that are used to organize the book: Behavioral and Medical Sciences; Business and Administration; Education; Engineering; Humanities and Social Sciences; Natural Sciences; and Technology.

Using data from the 2003 National Survey of College Graduates, I compared these 7 divisions in terms of the earnings of graduates (those whose highest degree is the bachelor’s). Specifically, the figures are the weighted means of the medians for each major within the divisions. (This approach gives extra weight to majors that have a large number of grads.) The dollar figures have been inflated from the year of the survey to 2010. As you can see, earnings vary considerably among the 7 divisions:
Here's another comparison, this time based on the job-growth projections of the Bureau of Labor Statistics for the occupations employing the graduates. For the graduates of each major, I inflated (or, in some cases, deflated) the number working in each occupation by the job-growth (or -shrinkage) figure that BLS projects for that occupation for the years 2010–2020. Then I collapsed the number of actual workers and the number of projected workers for each division and created a graph comparing the rates of projected growth:

Lastly, here’s a comparison of the level of job satisfaction expressed by grads of the 7 divisions. Again, I used weighted averages:

It’s interesting to note that the highest-earning divisions are not the fastest-growing divisions, and vice versa. Nor does job satisfaction correlate perfectly with either of these measures. However, it’s not necessary to choose between income, job opportunity, and job satisfaction when you choose a major: It is possible to find individual college majors that combine all of these payoffs. To identify them, read the book.

Thursday, May 17, 2012

Hindsight on College Majors

I recently finished the third edition of the College Majors Handbook with Real Career Paths and Payoffs: The Actual Jobs, Earnings, and Trends for Graduates of 50 College Majors. The book will be coming out this summer, and I just came upon a survey research report that makes a good case for why this book is badly needed.

The College Majors Handbook compares 58 college majors based on the real experiences of graduates, including their different earnings, rate of unemployment, rate of employment in a career related to their major, job satisfaction, and types of work activities, among other topics. If there’s one lesson to be learned from this book, it’s that different college majors result in very different career outcomes. Some of these differences are economic: rate of unemployment, amount of earnings. It follows that as the cost of a college degree keeps rising, the importance of choosing the right college major also is increasing.

This lesson is driven home by a study issued this month by the John J. Heldrich Center for Workforce Development at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy, “Chasing the American Dream: Recent College Graduates and the Great Recession.” The researchers—Charley Stone, M.P.P., Carl Van Horn, Ph.D., and Cliff Zukin, Ph.D.—surveyed a nationally representative sample of 444 recent college graduates from the class of 2006 through 2011 to see how they are faring in the workplace.

As I read the many interesting findings in this report, I zeroed in on what it said about the respondents’ choice of a college major. Perhaps the most interesting finding of all was how the grads responded to this question: “Thinking back to college, is there anything you would have done differently to be successful today?” The most popular response (at 37%) was “Been more careful about selecting my major or chosen a different major.”

Those who answered this way got a follow-up question: “With the benefit of hindsight, what type of major would you have chosen instead?” The most popular responses to this question were “Professional major, like communications, education, nursing, or social work” (41%) and “A major in the field of math, science, engineering, or technology” (29%). The College Majors Handbook confirms the wisdom of this hard-won insight; these majors do tend to result in higher earnings and likelihood of employment.

The report also reveals why the grads expressed this level of regret. It turns out that only 39 percent reported having thought about job opportunities in the field when deciding upon their major. No other reason seems to have played a significant factor in their choice of a major.

If you know someone who is deciding on a college major, don’t let this young person make an uninformed decision. Certainly, the career outcome is not the only factor that needs to count in the decision. But it is probably the most important factor. That’s why it’s informative to see what actually has happened to graduates of different majors.

Wednesday, May 2, 2012

Good News and Bad News About College Entry and Completion Trends

The good news about college entry and completion trends in recent decades is that women’s rates have been increasing and exceeding men’s rates, which should help diminish the income gap between men and women. The bad news is that these gains are distributed unevenly among income groups. In short, those who are well-off have enjoyed most of the gains, which means that this is yet one more factor that adds to inequality of opportunity and robs our economy of potential brainpower.

Two economists at the University of Michigan, Martha J. Bailey and Susan M. Dynarski, studied Census data and a longitudinal study to measure these trends among two cohorts of young people: those born in the early 1960s and those born around 1980. In their report, “Gains and Gaps: Changing Inequality in U.S. College Entry and Completion” (PDF here; abstract of related paper here), they found that the more recent cohort received more college education at all income levels. However, the gains were greatest at the top of the income distribution:
Those born to parents at the top half of the income distribution boosted their college entry rates by some 22 percentage points between the two periods. Those at the bottom quarter of the income distribution saw only a 10 percentage-point improvement. Rates of college completion showed a similar pattern: an increase of 18 percentage points for the top income quartile as compared with only 4 percentage points for the bottom quartile.

For the earlier group, rates of college completion for men and women were similar, but women in the later group had much higher rates of completion—especially those from a privileged background:
In college entry, persistence, and completion, women in the top-income quartile have pulled away from the rest of population. In the later cohort, an astounding 85 percent of women in the top quartile entered college. The gap between the top and bottom-income quartiles in college entry rose by fifteen percentage points among women. The comparable increase for men is seven percentage points. The pattern in completion is similar, with the gap between the top and bottom quartiles rising by seventeen percentage points among women and eleven percentage points among men.

The female advantage in college entry is not new; it has been a fact for every cohort of young women born since 1950, and the gap is now around 10 percent. Women gained the advantage in college completion (by age 25) with the cohort born in 1966, and the gap for this measure is also around 10 percent at present.

Economists and policy makers like to look for the causes behind trends, and these economists looked at two factors: high school graduation rates and cognitive skills. They note that they are unable to show actual causation; they can show only high correlations, acknowledging that (for example) unknown factors compelling students to drop out of high school may be the true causative factors for lower college completion rates.

When the economists compared the college achievements of those with high school diplomas and those with GED credentials, they found that increased high school completion rates explained only a small fraction of the increases in college entry and completion.

To measure differences in cognitive skills, they looked at students’ scores on the Armed Forces Qualification Test. They measured how well differences in these test scores could predict the gaps between the highest and lowest income quartiles in terms of college entry and completion. They found that cognitive skill differences explained less of the achievement gap for the later cohort than for the earlier cohort. In other words, for college achievement, brainpower seems to be diminishing in importance compared to economic privilege. That suggests that income inequality is causing our economy to lose badly needed talent.

But what about the increasing college achievement difference between men and women? The economists find the most convincing explanation is that college has increased the prospects for marriage and employment for women more than it has for men, and women are responding to these motivations by getting more college education. As the cost of a college education keeps rising, it seems likely that women from more-privileged backgrounds will have increasing ability to act on these motivations compared to less-privileged women.