Is college worth it? This was the question posed by the authors of the report called College Majors, Unemployment and Earnings, which was produced recently by The Center on Education and the Workforce. We do not plan on giving an detailed reporting on this report. Any interested reader can read the report here. Instead, we would like to look at two graphics in this reports, which are reproduced below. These two graphics are very interesting, which capture all the main points of the report. The data used in the report came from American Community Survey for the years 2009 and 2010.
Figure 1 shows the unemployment rates by college major for three groups of college degree holders, namely the recent college graduates (shown with green marking), the experienced college graduates (blue marking) and the college graduates who hold graduate degrees (red marking). Figure 2 shows the median earnings by major for the same three groups of college graduates (using the same colored markings).
Figure 1 ranks the unemployment rates for recent college graduates from highest to the lowest. You can see the descending of green markings from 13.9% (architecture) to 5.4% (education and health). So this graphic shows clearly that the employment prospects of college graduates depend on their majors, which is one of the main points of the report.
The graphic in Figure 1 shows that all recent college graduates are having a hard time finding work. The unemployment rate for recent college graduate is 8.9% (not shown in Figure 1). The employment picture for recent college architecture graduates is especially bleak, which is due to the collapse of the construction and home building industry in the recession. The unemployment rates for recent college graduates who majored in education and healthcare are relatively low, reflecting the reality that these fields are either stable or growing.
Everyone is feeling the pinch in this tough economic environment. Even the recent graduates in technical fields are experiencing higher than usual unemployment rates. For example, the unemployment rates for recent college graduates in engineering and science, though relatively low comparing to architecture, are at 7.5% and 7.7%, respectively. For computers and mathematics recent graduates, the unemployment rate is 8.2%, approaching the average rate of 8.9% for recent college graduates.
The experienced college graduates fare much better than recent graduates. It is much more likely for experienced college graduates to be working. Looking at Figure 1, another observation is that graduate degrees make a huge difference in employment prospects across all majors.
The graphic in Figure 2 suggests that earnings of college graduates also depend on the subjects they study, which is another main point of the report. The technical majors earn the most. For example, median earning among recent engineering college graduates is $55,000 and the median for arts majors is $30,000. Aside from the high technical, business and healthcare majors, the median earnings of recent college graduates are in the low $30,000s (just look at the green markings in Figure 2).
Figure 2 also shows that people with graduate degrees have higher earnings across all majors. The premium in earnings for graduate degree holders is substantial and is found across the board. Though the graduate degree advantage is seen in all majors, it is especially pronounced among the technical fields (just look at the descending red markings in Figure 2).
So two of the main points are (1), employment prospects of college graduates depend on their majors, and (2) the earning potential of college graduates also depend on the subjects they study. Is college worth it? The report is not trying to persuade college bound high school seniors not to go to college. On the contrary, the authors of the report answer the question in the affirmative. The authors of the report are merely providing the facts that all prospective college students should consider before they pick their majors. The two graphics shown above are effective demonstration of the facts presented by the report. According to the authors, students “should do their homework before picking a major, because, when it comes to employment prospects and compensation, not all college degrees are created equal.”