Saturday, October 24, 2009

Starting salary by category of college major

Here is a graph of starting salaries by general category of college major. These are the starting salaries for bachelor's degrees. Notice that technology-oriented degrees pay substantially more than other degrees. Business and science degrees take up the middle of the pack. Liberal arts and education majors are at the bottom.

Source: NACE Salary Survey, Fall 2009

If a student goes on to business school, law school, or medical school, the choice of undergraduate major would generally lose its influence on salary. Some natural complements are a liberal arts bachelor's degree combined with a law degree, a health sciences bachelor's degree combined with a medical degree,* or a liberal arts, sciences, or business bachelor's degree combined with an M.B.A.

One case in which the undergraduate degree continues to have a large influence on salary is the powerful mix of an engineering or computer science bachelor's degree combined with an M.B.A. This is because managers with both technical and business skills are needed at many computer, aerospace, and industrial companies.

I wonder how seeing a graph like this in high school might have affected my choice of college major. Probably not much since my multiple requests for a computer in high school were denied by my then-Luddite parents. Thus, I was intimidated by computers when I entered college.

People who like this post may also be interested in a previous blog post of mine, earnings by level of education.

* I have no idea how stringent the prerequisites are for medical school.
Posted by James Tags: ,

3 comments:

  1. What may be important to consider is if these are the salaries for graduates employed in their field. Also what the sample group is taken from (i.e. EDD data, members of a professional organization, alumni lists, large companies, subscribers to a professional magazine, etc.)

    Also, the spread within the group can be significant as some engineers making bank with a plethora of others making modest salaries can create a high average.
    (i.e. 20*$45000+1*$120000 )/11 = $92727.

    As well, the difference between a bachelor's and a masters can be significant. 1:(see comment below)

    The EDD has time-series data on number of people employed in the field along with percentile information of wages.

    http://www.labormarketinfo.edd.ca.gov/?pageid=1009

    This info will not only provide some idea of the spread but also a look at the trend, whether the industry has been adding significant number of jobs or shedding workers. (the demand)

    An additional consideration is the number of people graduating.

    Info for CA is available from the California Post Secondary Education Commission at

    http://www.cpec.ca.gov

    This will provide some idea of the supply of graduates. It also is available in time-series data.

    1: There was a time, and maybe still, that master's degrees tend to make more than PHds. My theory is that people that get lucrative jobs with a master's, or who's career track is moving upward very well, tend to stop there. The rest continue to get their PHd with many going on to teaching. Just a "theory" and teaching does have it's perks.
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  2. John said...
    "There was a time, and maybe still, that master's degrees tend to make more than PHds."

    When I took my social statistics class in college, the professor said that master's degrees pay more than Ph.D.s. Perhaps that was true once upon a time, but it's not true anymore. See this graph of weekly salary and unemployment rates for different education levels.

    http://www.bls.gov/emp/emptab7.htm
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  3. John said...
    "(i.e. 20*$45000+1*$120000 )/11 = $92727."

    The main problem here is your math! You've got 21 college graduates, but you're dividing by eleven! The actual average in your example would be $48,571. Even if you had multiplied the first group by 10 instead of 20, the average of $51,818 would have been over $40,000 less than you claimed.

    Of course, you can make an example as absurd as you want it to be simply by making up any numbers you want.

    The point of this blog post is not to tell college students exactly what they will earn, but to give them an idea of what the general salary prospects are for one major versus another. Year after year, NACE finds that engineering and technology degrees pay substantially more than other fields. Payscale.com finds similar results using a different methodology.
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