A recurring question that I am asked almost weekly is, “What is the best major for my daughter, son, granddaughter or grandson?” This is not always easy to answer, since not all people have skill sets and an underlying education allowing then to be proficient in all majors.
As we are all aware, not all college degrees are equal when it comes to employment opportunities and compensation. There are tradeoffs. Even after considering income and the likelihood of getting a job, the demands and lifestyle also come into play. Some people want certainty of employment while others desire a lifestyle. Some are driven by compensation. So how does one assess these education options?
As an appraiser by trade, I am always looking for comparable sales. Comparables here would be how recent graduates within specific majors are faring. In the employment industry, factors would include unemployment rates by college major, compensation of recent graduates (and those in the workforce years after graduating), and underemployment.
Underemployment occurs when:
- An individual is in a job with a required skill set below the capability of the worker
- A highly skilled worker in a low paying job
- A worker desiring full-time employment but can only find part-time jobs
When I was working at Texas A&M University, underemployment was a serious problem. Since both undergraduate and graduate students were there for typically just a few years, many of them and their spouses were very underemployed.
To assess the opportunities of various college majors, the Federal Reserve Bank of New York quarterly updates an analysis of 73 majors. Their parameters and methodology centered on the following:
- Unemployment and underemployment rates are for recent college grads aged 22 to 27 with a bachelor’s degree or higher
- Median wages are for full-time workers with a bachelor’s degree only
- Early-career graduates are aged 22 to 27 while mid-career graduates are aged 35 to 45
- Graduate degree share is based on those aged 25 to 65 with a bachelor’s degree or higher
- Underemployment rate is defined as the share of graduates working in jobs that typically do not require a college degree. A job is classified as a college job if 50 percent or more of the people working in that job indicate that at least a bachelor’s degree is necessary otherwise the job is classified as a non-college job
- Annual wages are expressed in constant 2015 dollars
So what are the top careers? That cannot be directly answered. The three following tables show the top majors as ranked by three differing parameters: Early Career Wages, Mid-Career Wages and Lowest Unemployment Rate. Not surprisingly, engineering scores well regarding income — in both early and mid-career. In the long run, pharmacy tops the income segment, while education, agriculture, construction and nursing majors have the lowest unemployment rates. Mathematics is obviously the common core in all of the top-paying jobs.
Top Early Career Wages
Top Mid-Career Wages
Lowest Unemployment Rate
Attached is the full list of all 73 majors and respective metrics. Click here for pdf.
To read the entire report and access the data, click https://www.newyorkfed.org/research/college-labor-market/college-labor-market_compare-majors.html
These wages should in no way be interpreted as actual earnings, but rather as central moments of typical results. Every person is different in their skill sets, work ethic, character and actual performance.
As always I again reiterate that college is not for everyone.
Ted