A new report from Georgetown University entitled “Hard Times College Majors,Unemployment and Earnings, Not all college degrees are created equal” by authors Anthony P. Carnevale, Ban Cheah and Jeff Strohl attempts to show where jobs are found for recent college graduates and the fields those thinking of going to college or declaring a major might find the best employment on graduation. Below the text and tables from the report are reported.
The question, as we slowly dig out from under the wreckage left by the Great Recession, is unavoidable: “Is college worth it?” Our answer: “Yes, extensive research, ours included, finds that a college degree is still worth it.” A Bachelor’s degree is one of the best weapons a job seeker can wield in the fight for employment and earnings. And staying on campus to earn a graduate degree provides safe shelter from the immediate economic storm, and will pay off with greater employability and earnings once the graduate enters the labor market. Unemployment for students with new Bachelor’s degrees is an unacceptable 8.9 percent,1 but it’s a catastrophic 22.9 percent for job seekers with a recent high school diploma—and an almost unthinkable 31.5 percent for recent high school dropouts.
Here is a look at several factors that current and future college students should consider as they choose their courses:
The risk of unemployment among recent college graduates depends on their major. The unemployment rate for recent graduates is highest in Architecture (13.9 percent) because of the collapse of the construction and home building industry in the recession. Unemployment rates are generally higher in non-technical majors, such as the Arts (11.1 percent), Humanities and Liberal Arts (9.4 percent), Social Science (8.9 percent)1 and Law and Public Policy (8.1 percent).
Unemployment in majors related to computers and mathematics vary widely depending on the technical and scientific content of the major. Employers are still hiring technical computer specialists who can write software and invent new applications. But for information specialists who use software to manipulate, mine, and disseminate information, hiring slows down in recessions. We can see the difference in unemployment between people who invent computer technology as opposed to people who use computer technology. The unemployment rate for recent college graduates in Information Systems has spiked to 11.7 percent, while the rates for majors in Computer Science and Mathematics are 7.8 percent and 6.0 percent, respectively.
Computer majors are likely to bounce back strongly as the recovery proceeds. For example, the unemployment rate for recent college graduates who major in information systems is a hefty 11.7 percent, but only 5.4 percent for experienced workers who major in Information Systems.
The Education, Healthcare, Business and Professional Services industries have been the most stable employers for recent college graduates. Unemployment rates are relatively low (5.4 percent) for recent college students who majored in Healthcare and Education because these majors are attached to stable or growing industry sectors. Recent graduates in Psychology and Social Work have relatively low unemployment rates (7.3 percent) nearly half work in Healthcare and Education. The same is true for unemployment among recent college graduates who majored in the Life and Physical Sciences (7.7 percent). More than 60 percent of these recent college graduates who are working have landed in the Healthcare, Professional Contracting Businesses or Education sectors.
Business majors have low unemployment rates (7.4 percent) with the exception of those who specialize in Hospitality Management (9.1 percent), which is hampered by the ongoing slump in Travel and Tourism. Similarly, recent graduates in Engineering do relatively well (7.5 percent unemployment), except for Civil and Mechanical Engineers who are still suffering from the deep dive in manufacturing and construction activity.
Majors that are more closely aligned with particular occupations and industries tend to experience lower unemployment rates. Majors such as Healthcare, Education and those related to technical occupations tend to have lower unemployment rates than more general majors, like Humanities and Liberal Arts, where graduates are broadly dispersed across occupations and industries. Unemployment rates for recent graduates in Healthcare and Education are 5.4 percent compared to 9.4 percent for people who majored in Humanities and the Liberal Arts. More than three out of four people who major in Education work in the Education industry while no more than 20 percent of Liberal Arts graduates are concentrated in any single industry.
At the same time, majors that are closely aligned with occupations and industries can misfire. For example, tying oneself to a particular major can be a problem if the associated occupations or industries collapse. Unemployment rates for recent college graduates who majored in Architecture start high at 13.9 percent and, due to its strong alignment with the collapse in construction and housing, unemployment remains high even for experienced college graduates at 9.2 percent.
As the recovery proceeds and recent college graduates gain access to work, especially in their major fields, their unemployment rates will drop substantially. Employment patterns among experienced workers who have been out of college for a while suggest that recent graduates will fare better as the recovery continues. With the exception of majors in Architecture, International Business and Theater Arts, more experienced workers have substantially lower unemployment rates and higher earnings than recent college graduates.
Graduate degrees make a quantum difference in employment prospects across all majors. Sometimes, when unemployment is high, the best strategy to increase future employability is to go to graduate school. The unemployment rate for people with graduate degrees is 3 percent compared with a 5 percent unemployment rate for those with a BA (recent college graduates and experienced workers holding a Bachelor’s degree). With the exception of majors in the arts and Architecture, unemployment rates for people with graduate degrees range between 1.9 percent and 4.0 percent. Graduate degrees tend to outperform BA’s on employment in part because advanced degrees represent higher levels of human capital development and because those degrees are more closely aligned with career pathways in particular occupations and industries.
What college graduates earn also depends on what they take. Median earnings among recent college graduates vary from $55,000 among Engineering majors to $30,000 in the Arts, as well as Psychology and Social Work. In our more detailed data—which drills into the broad categories to look at results for more individual, specialized majors—the variation is even more pronounced, ranging from $60,000 for Computer Engineering graduates to $24,000 for Physiology majors.
Majors with high technical, business and healthcare content tend to earn the most among both recent and experienced college graduates. Engineering majors lead both in earnings for recent and experienced college graduates followed by Computer and Mathematics majors, and Business majors. Recent graduates in Healthcare majors start out with high earnings, but begin to lose ground to Science, Business and Engineering as college graduates gain experience and graduate degrees. Graduate school further differentiates earnings among majors.
Majors that are most closely aligned with particular industries and occupations tend to have low unemployment rates but not necessarily the highest earnings. Some majors offer both high security and high earnings, while other majors trade off earnings for job security. Healthcare, Science and Business majors have both low unemployment and the highest earnings boostfrom experience and graduate education. At the same time, Education, Psychology and Social Work majors have relatively low unemployment, but earnings are also low and only improve marginally with experience and graduate education.
Although differences remain high among majors, graduate education raises earnings across the board. The average earnings for BA’s now stands at $48,000 compared with $62,000 for graduate degrees. With the exception the Arts and Education, earnings for graduate workers range between $60,000 and $100,000.
It is easy to look at unemployment rates for new college graduates or hear stories about degree-holders forced to tend bar and question the wisdom of investing in higher education when times are bad. But those questions should last only until you compare how job seekers with college degrees are doing compared to those without college degrees.
Today’s best advice, then, is that high school students who can go on to college should do so— with one caveat. They should do their homework before picking a major because, when it comes to employment prospects and compensation, not all college degrees are created equal.
Get the complete Georgetown University report here:
http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/Unemployment.Final.update1.pdf
