Gas station without pumps

2011 May 24

Median Earnings by Major and Subject Area

Filed under: Uncategorized — gasstationwithoutpumps @ 09:14
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The Chronicle of Higher Education just posted Median Earnings by Major and Subject Area, a graphical depiction of census data about “full-time, full-year workers ages 25 to 64 whose highest degree is a bachelor’s. ”

The economic value of a bachelor’s degree varies by college major. New data from the U.S. Census Bureau show that median earnings run from $29,000 for counseling-psychology majors to $120,000 for petroleum-engineering majors. Even when majors are looked at by groups, such as business or health, there is variation in pay depending on the specific major.

The results make it clear that the value of a bachelor’s degree varies enormously by major, in unsurprising ways (engineering tends to pay well with a B.S., then computer fields, business, health, physical sciences, … ). I notice that my son’s two favorite subjects, computer science and theater, are at opposite ends of the spectrum ($75k and $40k).  Of course, he is planning on going on to grad school, which changes the salary picture.

Going to the census tables that aggregate over all majors (25-64, all races), we see that the median income for different levels of degree holders:

Total no bachelor’s Less Than 9th Grade 9th to 12th Nongrad Graduate (Incl Ged) Some College No Degree Associate Degree Total bachelor’s and up Bachelor´s Degree Master´s Degree Professional Degree Doctorate Degree
35,727 17,095 19,844 27,967 32,363 36,374 52,256 47,345 60,957 100,374 80,944

One thing that the data do not show is the level of unemployment. A high salary for those employed is not much consolation for those with the same degree who can’t get a job. The Census medians do include the unemployed (at $0), so the median measure does reasonably show the effect of unemployment.

Another likely distortion is that the median salary measure hides any effect of age or years of employment. If some field has been unpopular for the past 30 years, then almost everyone in it is nearing retirement age, and the salaries may seem quite high, even if they are actually comparable to salaries in a different field.  There are ways to compensate for age effects, but one either needs a lot more data or some pretty strong assumptions about how years of employment affects salary (for instance, that current salary is the product of two independent effects: the degree and years of employment).  I don’t know whether this distortion is responsible for biological engineering being the lowest of the engineering degrees, or whether it is carryover from the lower salaries of biology majors.  Biomedical engineering (which is almost the same field) reports much higher median salaries.

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