A recent report from the New York Fed looks at the economic benefits of college. While there has been a great deal of talk about the “bubble” in higher education the Fed finds college is very wise economically for most people. They do find a larger portion of people that are not getting a great return on their investment in higher education.
That could well indicate students studying certain majors and perhaps some people with less stellar academic skills would be better off economically skipping college.
It is hard to beat a 15% return. Of course averages hide variation within the data.
The return to engineer graduates was the greatest of all disciplines examined. Engineering graduates earned a return on their investment of 21%. The next highest were math and computers (18%); health (18%); and business (17%). Even the lowest returns are quite good: education (9%), leisure and hospitality (11%), agriculture (11%) and liberal arts (12%).
These returns look at graduates without post-graduate degrees (in order to find the value of just the undergraduate degree). As those with higher degrees benefit even more but the return on graduate degrees is not part of this study and they didn’t want to confuses the benefits of the post graduate degree with the bachelors degree.
As the article points out those fields with the top returns are more challenging and likely those students are more capable on average so a portion of the return may be due to the higher capabilities of the students (not just to the major they selected). They don’t mention it but engineering also has a higher drop out rate – not all students that would chose to major in engineering are able to do so.
This is one more study showing what we have blog about many times before: science and engineering careers are very economically rewarding. The engineering job market remains strong across many fields; many companies are turning to engineering job placement firms to find specialized staff. While the engineers do voice frustration at various aspects of their jobs the strong market provides significant advantages to an engineering career. As I have said before the reason to chose a career is because that is the work you love, but in choosing between several possible careers it may be sensible to consider the likely economic results.
The study even examines the return for graduates that are continually underemployed (I am not really sure how they get this data, but anyway…) the return for engineers in this situation is still 17% (it is 12% across all majors).
Related: Earnings by College Major, Engineers and Scientists at the Top (2013) – Engineering Graduates Continue to Reign Supreme (2013) – Career Prospect for Engineers Continues to Look Positive (2011)