This audio is generated automatically. Please let me know if you have any comments.
Diving overview:
- lifetime Return on College Education A new peer-reviewed study published in the American Educational Research Journal found that it varies greatly by major, but also by the student's gender, race, or ethnicity.
- In general, earning a bachelor's degree provides a return of about 9 percent for men and nearly 10 percent for women, the researchers concluded. The highest-earning majors were computer science and engineering.
- Black, Hispanic, and Asian college graduates have slightly higher rates of return than white graduates.
Dive Insights:
The analysis used data from the U.S. Census Bureau's American Community Survey from 2009 to 2021 to survey 5.8 million Americans ages 18 to 65. Half of individuals' highest degrees were bachelor's degrees. The other half had only a high school diploma.
“Our cost-benefit analysis shows that, on average, a college degree provides better returns than the stock market.” Zhang Lianga higher education professor at New York University said in a press release.
Engineering fields had the highest returns among the 10 majors studied, with returns of nearly 19% for women and nearly 14% for men. Computer engineering followed at almost 15% for women and 13% for men.
In some cases, returns for men and women were noticeably different. For women, the rate of return for health-related majors was lower at 13.7% and for math-related majors at 11%. Men had slightly better returns, at 9.3% for math and 8.8% for health.
Researchers found that education, humanities, and arts majors had the lowest returns.
Zhang suggested that students who choose less lucrative majors consider pursuing more training or education to help their job prospects.
“From a public policy perspective, if a particular major is considered essential to society but has low returns, policymakers may consider increasing financial support for students in that major or raising wage levels for workers in related occupations,” Zhang said. said: “This could help ensure that the social benefits of majors are recognized, even if the individual returns are low.”
Higher rates of return for female, black, Hispanic, and Asian students do not mean that these groups earn more than white or male students over the course of their careers.
Conversely, women in our sample earned significantly less than men, especially among the group that earned only a high school degree.
Women are more likely to initially see an increase in earnings because they have a lower opportunity cost of attending college and therefore lower potential earnings during that period.
The researchers suggested that the decision to look at students with only bachelor's degrees may have underestimated the rewards many graduates gain from majors that pursue advanced degrees. For example, biology and life science majors are most likely to earn higher degrees.