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2012 November 10

How much is a degree worth?

Filed under: Uncategorized — gasstationwithoutpumps @ 12:14
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The ongoing privatization of higher education in the USA is driven largely by a view of education as a private good (of benefit primarily to the one receiving the education) rather than a public good (where society as a whole reaps the benefit of an educated populace).  To make the “private good” view work, one has to convince people that there is a substantial benefit to the recipients of the education that far exceeds any benefit to society.  This has generally been done in crassly monetary terms, talking about the earnings of graduates compared to those with less education (generally in lifetime earning terms, to make the differences appear as large as possible). By using a purely monetary assessment, one can conveniently ignore all the other effects on society, and pretend that education is purely a private investment in increasing earning potential.

Where there is a demand for data that can be fairly easily collected, someone will supply it.  One of the most thorough ones I’ve seen on the economic value of a college degree to the recipient is “What’s It Worth: The Economic Value of College Majors” by Anthony P. Carnevale, Jeff Strohl, and Michelle Melton, published by Georgetown University in May 2011. The report relies on US census data from the 2009 American Community Survey, so has a large sample size (over half a million people and about 320,000 people with bachelor’s degrees), but is a little dated.

The authors calculated summary statistics from the census data, looking mainly at median income for bachelor’s degree holders in various fields.  They also looked at 25th and 75th percentile earnings, earnings boost from graduate degrees, employment status, gender, race, and occupation classification.

There is no mention in the methods section of any correction for age, which means that the numbers are not very good predictions of either starting salaries or eventual salaries for people entering the field.  Old fields in which everyone is nearing retirement age will have much higher salaries in the report than people entering the field will see, while new or rapidly growing fields will have reported numbers closer to starting salaries.

Comparing male and female salaries without correcting for years of experience can also lead to some major distortions of the data. In engineering fields where the “leaky pipeline” leads to much greater losses of experienced females than experienced males, one would expect the data to show higher median salaries for the males even if there is no salary discrimination.  But even in the fields where one would expect the distortions to be inflating the female salaries relative to the male salaries (like nursing), males are still earning more than females—so there probably is some gender-based salary discrimination in the census data, but one would need a different analysis of the raw data to determine how much.

There are very few surprises in the data.  Engineering and computer science are near the top of the salary scale, followed by business, health, and physical science.  There are a whole bunch of fields in the middle, then humanities, arts, education, and psychology at the bottom.  Some of the clustering is a bit idiosyncratic (like putting computer science and computer engineering with math, rather than with engineering), but the individual fields can be examined by looking within the separate chapters.

For engineers and computer scientists, median earnings are around $70k–75k, with men earning about 25% more than women (remember, this median is over all employees, not comparing individuals with the same amount of experience). There is about a 1/3 boost in salary from earning a graduate degree in these fields.  Physical sciences BS degrees result in lower salaries, but the boost from a graduate degree is much higher.  This report did not distinguish between MS and PhD degrees, and I suspect that the engineering salary boost comes mainly from the lower cost MS, while the physical science boost comes from the more expensive PhD. Again, a different analysis would be needed to compare the salary boost for different graduate degrees.

I noticed that in computer science and computer engineering there is low unemployment (5–6%), about 55% of the degree holders were working in a computer job with 15% having moved into management, while in other engineering fields, there is about 4–5% unemployment, but only about 35% of engineers worked in engineering, and 20% had moved into management.  I suspect that the high number of computer science degree holders remaining in computer work reflects both the demand for the degree holders (jobs are available) and a fairly high level of satisfaction with the work (people aren’t burning out).

At the other extreme, theater arts majors have very low salaries ($40k) and high unemployment (9%), and most are in management or office work, with only 12% in arts jobs.  I suspect that the low salaries, high unemployment, and employment outside the field is due to the very small number of theater jobs compared to theater majors.

For students (and parents) looking at likely eventual outcomes of different courses of study, the report is informative, but pay attention to the wide spread of salaries in most fields.  Only half the degree holders earn more than the median, and a quarter earn less than the 25%ile level, so there is no guarantee that completing a particular degree will result in the reported levels of salaries.


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.

2011 April 14

Faculty salaries

Filed under: Uncategorized — gasstationwithoutpumps @ 19:48
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The American Association of University Professors recently released their annual salary report: AAUP: 2010-11 Report on the Economic Status of the Profession.

There are all sorts of interesting statistics, sliced and diced in a myriad of different ways.  I tend to look at the distribution to see where my salary falls on the scale (a little below the middle for full professors at Category I institutions) and how my institution does overall (as always, UCSC is the worst-paid of any of the UC campuses, but a little better than the Cal State schools).

Any grad student or postdoc thinking of looking for academic jobs would be well-advised to read this report to know what the going rates are in different institutions.

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