“Your single best investment is your own education.” “The average new graduate is drowning in $22,000 in debt.” “A degree in English is just as valuable as a degree in Biology — it teaches you critical thinking!” “Follow your dreams and you’ll find financial success whatever your major is!”
You’ve probably heard a thousand pieces of educational/career advice like these, and if your family/friends/advisors are anything like mine they’ve virtually never been substantiated by data. That is a shame, because choosing a course of study is one of the largest transactions you’ll ever make — the sticker price at my alma mater was close to $140,000 and prices nationwide have risen faster than inflation for virtually a generation now. We have the Blue Book to tell you what a ten year old beater is worth down to the dollar, there are entire industries devoted to assessing every type of security to determine their valuation, and the closest thing most students have to insight on the degree selection process is getting advice from Aunt Sue. This is insane.
Information Asymmetry In Employment Outcomes
Any college could rectify this situation virtually overnight: take that lovely list of alumni that they obsessively curate for squeezing donations, send out a two question survey (“What did you major in?” and “What was your salary this year?”), and give a sociology grad student a bowl of ramen to do some very simple number crunching. No college will actually do this because transparency goes directly against their interests: if all degrees from a particular institution are valued at “An uncertain, but certainly large and roughly constant number”, then the standard practice of pricing them all identically makes sense. If not, it is the academic equivalent of pricing stocks by length of ticker symbol.
(I understand many folks enjoy the non-economic component of their education. I did and do, too, but since I’ve never spent $120,000 and signed myself up for a decade of debt for the sheer enrichment offered by attending a ballet or reading about the Japanese economy I can only conclude that I don’t value it anywhere near what I paid for my degrees. Your objection to the narrowness of this study is duly noted, though.)
You might assume that the government would track this, somewhere, but you’d be wrong. The Census Bureau produces a report every ten years tying level of education (associate’s degree, bachelor’s degree, master’s degree, etc) to salary, which invariably produces the result “More education is better”, but they don’t answer very interesting questions like “Is a bachelor’s degree in computer science better than a master’s in elementary education?” or “Are there fields with a sharply diminishing return to additional education?”
However, the Bureau of Labor Statistics does very comprehensive work in administering a National Compensation Survey, which gathers huge amounts of raw data about employment hours and wages broken down by region, job (over 800 classifications available, from CEOs to ship loaders), and a few other axes. They use this and other studies to produce a variety of government reports, such as the Occupational Outlook Handbook, which does a good job of providing per-career advice but probably intentionally omits comparisons between careers.
The Bureau of Labor Statistics also makes the data from the NCS available for download on their website. It is hefty — over a gigabyte of plain text — but it contains a virtual treasure trove of value… if you just know how to read the map.
Liberating Conclusions From Open Data
Recently, a big buzzword in the tech community has been Open Data: the notion that the huge, monstrous streams of raw facts collected by the government can be exploited for our benefit if they are merely shared. I think this is mostly true: the best single example I’ve heard of is that since your local health authorities inspect every restaurant’s premises as a matter of course they must know where they all are located, and therefore one should be able to get those locations from them and jumpstart the creation of a guide to local restaurants without having to find every one by yourself (a monumental undertaking).
However, raw facts are uninteresting. Here’s a line from the BLS data:
NWU009910010200000000000016260,2008,M07,69.71
Scintillating stuff, right? What we are really interested in is what those facts can teach us — in particular, what can they teach us that allows us to make decisions such as what to major in. This is where your friendly neighborhood computer programmer comes in: with a bit of elbow grease and a laptop, you can reduce the 856,000-odd facts in the government’s salary data to some useful conclusions about college majors.
A Bit Of Science And A Dash of Art
Sadly, there are limitations to what we can accomplish with the BLS data: it groups salary data by occupation rather than by major and degree level. The BLS separately identifies for each occupation what the probable degree level is, but going from occupation to degree requires a bit of guesswork. Rather than associating all occupations with sets of related degrees by hand, and injecting my own biases into the analysis, I decided to crowd source the problem: I paid Mechanical Turk workers for their two cents (quite literally) on what degree an e.g. elementary school teacher likely had. This produced answers like Education, Early Childhood Education, Teaching, English, etc.
I then used an arbitrary level of consensus as a cutoff, and was able to pair ~60 very popular degrees (Computer Science, English, etc) and ~250 less common ones (Vocational Education, Media Technology, etc) with associated occupations. Some additional number crunching let me construct rough estimate salary-versus-age curves for the occupations, which could then be reduced into a simple net present value calculation. Long story short: a lot of data, a bit of science, and a dollop of absolute voodoo — it’s sort of like most social science, except I’m going to be honest about the voodoo upfront.
After doing the calculations I used Ruby on Rails and some open source graphing libraries to present the results in a comprehensible, searchable fashion — similar to the data visualizations done by the New York Times, which are some of the best work they produce. (Check this one on the geography of the recession for the general feel.)
Why Go To All This Trouble?
Short story: Intellectual interest plus a nice paycheck.
Longer story: I do very occasional consulting work for a variety of clients. In case you haven’t noticed from the six-figure sticker prices, offering degrees is a very big business. Any flowing river of cash that large attracts, as if by magic, a variety of service providers around it. In education, one major problem colleges have is finding prospective customers to sell degrees to. This is hardly a unique problem for businesses. (Colleges may prefer to phrase this as “students” to “award” degrees to, because they are intellectually committed to a view of themselves as custodians of the lamp of human knowledge rather than rapacious money-grubbing institutions. I don’t know of any reason they can’t be both.)
One thing colleges — from the Ivies to state schools to online for-profit institutions — spend absolutely gobsmacking amounts of money on is “lead generation”. Basically, since a percentage of applicants will eventually matriculate (and pay five or six figures for the privilege), when a qualified prospect fills out an application that is an economically beneficial event. You can compare this to a conversion to the free trial of a web service. Universities are willing to pay quite a bit of money if you can induce someone to apply: the payout varies by university and agreement, but payments in the $10+ region just for requesting an application packet are not uncommon. (And if you had some magic way of generating sought after candidates — say, highly qualified African American students — you could almost certainly negotiate much, much higher payouts. There might still be some Marxists on the faculty but it is all capitalists in the administrations.)
Anyhow, with universities offering to pay for lead generation, there is an entire value chain created from the ether: sites to capture the leads, affiliate programs to direct folks to the lead capture sites, advertising to attract visitors to the affiliates, publishers to create content which displays advertising, etc. One of the publishers in the industry, Online Degrees, hired me with an open brief: make something compelling for our website. I thought since universities, academics, and the government have failed to produce any actionable data on which degrees make sense to go after, I could do some independent research on the subject. Online Degrees.org will host it on their website, and in the course of providing value to potential students researching the subject, they’ll have an opportunity to display ads for degree programs.
You might be concerned about the impartiality of this. I don’t blame you. I’ve got no particular dog in this fight: I get paid by the hour no matter what degree wins. (Cards on the table: I have degrees in Computer Science — which is in the data set — and East Asian Studies, which is not.)
Online Degrees.org obviously has a vested interest in convincing you that a having a degree is better than not having one, but they’re agnostic about which one you apply for. Indeed, they’d love to tell you which fields are better than others because somebody in the industry needs to have the credibility to say that e.g. culinary school is tantamount to grand theft (and most of the victims take out loans for the privilege of going through it).
Besides, do you really have a better alternative? If I had a PhD in Sociology, would that make me a less biased source of information on the desirability of becoming a cheap source of exploitable labor a master’s candidate in Sociology?
Anyhow, I have been intellectually interested in this subject for several years now.
Quick Overview Of Results
For the results of most particular interest to you, take a gander at the degree value calculator.
Regular readers of this blog are mostly technologists of one flavor or another, and degrees in technical majors do very, very well. Computer Science and Computer Engineering are near the top among all options for bachelor’s degrees. It is narrowly bested by a handful of degrees tailored around resource extraction: for example, if you study Geology, Big Oil will apparently pay you Big Bucks.
Hard sciences such as Physics and Biology pay rather less well than I would have expected. Degrees in the humanities perform about as poorly as people often joke. The largest surprise to me was that degrees, even advanced degrees, in some caring professions (like Social Work) are apparently terrible options. Looking at the underlying data suggests that this because many social workers do it as a part time job. (That is a recurring theme among many jobs that I expect people would classify as more likely to be female than the typical occupation. Food for thought the next time someone brings up the wage gap.)
You can see the results of this research on their website. [Edit as of 2/19/2013: You’ll have to search for this directly, due to link rot.]
Questions? Comments? Criticisms? I’d love to hear them.
Good work. I find this a bit comforting.
However, the real question is: What does the job market have to offer graduates in specific geographic locations?
For example, I live in Michigan and the IT job market (the field I’m pursuing) is dismal here.
Another note I want to make as well, is that when individuals ask me what college they think they should attend, I usually refer them to non-profit and public colleges.
I’ve seen some of the tricks that some for-profit institutions will pull to get individuals to fill out forms to essentially rip them off.
Yet these for-profit schools I think are having a negative affect on non-profit schools sheerly through just competition.
I personally would like to see the FTC scrutinize for-profit and even non-profit (to be objective) application processes and loan processes highly, especially with applicants who may be naif.
Lastly, if this exists I would love to see this but I don’t think it exists: a sense of transparency and break-down of what schools are spending their money on. I’m highly confident that colleges could be audited to save students money and possibly their credit scores.
Very good work, really helpful.
I think it is important especially for the people who aim for the so-called underpaid fields, so that they can raise their courage and follow their heart KNOWING they are going against the “odds” and what the “market” is telling them they will worth (at least monetarily speaking ). At least we will have a better percentage of theologists that chose to be such because they were really interested in God…
One think I ( or probably you ) might be interested in is the trend of the salaries. Did computer engineering paid that well 3 years ago? Better or worse? Is it in fact declining, which means that if you enter now you may graduate into a saturated field which will be paying less than you were betting on?
Of course you don’t have BLS data for the future, but you have from the past, don’t you. You can then add another dimention to your analysis ( and how your clients can pitch ).
Nice work!
One technical note: the autocomplete box for “Your Major” is case sensitive. Made it a little hard to find my degree when I typed in “compu”. I had to go back and type in “Compu” to get results.
My major wasn’t on the list (Philosophy), which is somewhat understandable, since “Philosopher” probably isn’t considered an occupation by the government. However, it does call attention to the limitations of this method. I got a job at an ISP and worked my way up to being a network engineer. Other people who were in my program went to law school then got jobs at large and small firms. Another guy works for a big ad agency. Nothing obviously links our occupations to our degree.
Based on my limited sample, philosophy majors make decent salaries. However, there is no way for this to be reflected in your analysis.
I can only hope that this may serve as an impetus to get some real surveys and research in this area.
btw Patrick, when reading this in IE8 8.0.6001.18702 the nbsp entities after the periods display as a capital “A” with accent.
I waited till I was a “mature student” before going to university. Straight out of high school I wasn’t passionate enough about anything going at university, so I decided to wait. Once I got clear about what really drove me, years later, then I went to university and choose something completely artsy and highly unlikely to earn a well paying living from it… But being the idealistic type, I went for it and it changed my life. Ever grateful for my decision. Economics obviously plays a role in my life, but not for everything.
I never had a degree – worked in the business world and earned a 6 figure income, than the dot bubble came and people said that without a degree you won’t get hired – everyone was looking for either a BS or a BA – so I went back to school while working full time and earned my associates first than my BSBA in Business Administration Honors. I don’t make 6 figures anymore and I am unemployed and in debt but I have that college degree. Now the business world wants Masters or PHD so I am going back for that. Over 30 years working blue/white collar and now I have a piece of paper that says I graduated. What did I learn. Societal standards need to upgrade their thinking. We could do with a lot less colleges if we trained people in high school for vocations that they want to do. Think I will survive through all these societal wants to get ahead? Stay tuned. What does a college education do for you that you can’t do for yourself. In my case not much and I am not here to candy coat – I am here to eat the candy.
Very, very nice work. One thing that jumped out at me in the graphs was the lack of units on the X-axis. It shows “0” at the left, but does not show that the grid is showing lines at multiples of $20k or $1m; you have to figure that out from hovering over particular data points.
And now I’m feeling smug with my BS in Computer Engineering and BA in Mathematics. ;)
I’ll have to replicate this research when my kids approach college age. I wonder how much will have changed by that time.
I’ve been advising people to always take a numerate degree for years. Then afterwards if you still want to do the arts degree at least the income from your job gained with your numerate degree can pay for the second arts degree.
You can’t do it the other way around – pay for a numerate degree with the income from a job gained with a non-numerate degree.
I disagree with you Re; Physics degrees. Physics is apparently one of the most common degrees held in the City of London. Banks love people with Physics degrees – highly numerate, can grasp very complex problems, easily retrainable in finance – paid very highly indeed. Sure if you want to get a Physics degree and study Physics, that will be limiting, but in terms of your options at the time you graduate, Physics is probably the #1 most versatile degree you can have.
Its a real shame that when people are going through school they are not informed that maximising their chances is helped greatly by having a versatile numerate degree.
Nice article, you’ve summarised and proved what I have thought for quite some time.
The sites are just giving me 404 after a quick blink of the site. I.E. 7
How could you not include Philosophy majors? While those who go on to teach obviously won’t be in the top tax bracket any time soon, those who go into industry often exceed the performance of their peers based upon their ability to think logically and present cogent arguments.
I have a degree in Computer Science and I thought about pursuing a PHD, but I decided that I couldn’t increase my salary enough to warrant the cost. I work with many people who have PHDs, but it doesn’t seem to make a difference to their salary.
Thanks for sharing.
When I was 18 and off to college, I specifically avoided any thought about my potential future income. Despite being raised by a successful entrepreneur, I was a spoiled hippie obsessed with social justice. I majored in History and Asian American Studies and absolutely loved every minute of it. My studies had a huge influence on my overall worldviews and I still really enjoy reading history texts. But while I originally intended to get my doctorate and teach college history, I ended up a software developer instead. Because of that, I sometimes question whether I would have been better off with a CS degree. The truth is, in every quantifiable way, I think that’s true. Certainly it would open many doors in my chosen career path. But at age 18 I simply wasn’t interested in computers and I think I would have performed poorly in that major. Looking back, I do not regret my educational choices. If I were to advise a recent college entrant on what major to choose, I think I would still reiterate what I was told as a teenager: pick what ever appeals to you the most and you’ll eventually find your way. However, that said, knowing what you can reasonably expect to earn with a given degree could play a significant role in that decision. It wouldn’t have for me personally, but for many people it would. Great article.
Great post; I’ve just got one minor comment re: the social work thing. One thing to keep in mind is that a lot part-timers in the social work field aren’t doing it that way by choice. I know of a number of agencies that, for various reasons, can’t/won’t/don’t hire full-time staff.
The really sick thing is that, even given the comically bad compensation and (often) incredibly stressful and difficult work, social work can be a very competitive field to get started in. It’s not uncommon to see people with MSW degrees to be lining up to apply for a job that will just barely break minimum wage.
On caring professions: I don’t have any data with a meaningful sample size here, but I do know a decent number of current and former social workers. If I may be direct here, they’re basically saints. How ever many hours they’re officially working (that is, getting paid for) they’re working well past full time because they have to in order to do their jobs. That’s partly because they’re just committed people, and partly because social work agencies are chronically understaffed. This only strengthens your point about the financial value of a social work degree, but don’t imagine for a moment that the reason they don’t make much money is because they don’t have to do much. I think it’s fairly safe to say that people aren’t going into social work for the money.