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.
Do the Benefits of College Still Outweigh the Costs?
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)
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Career Prospect for Engineers Continues to Look Positive
Posted on August 12, 2011 Comments (11)
As I have written previously the career prospects for engineers are bright around the globe. Many countries realize the importance of engineering and have taken steps to compete as a center of excellence for engineering. It is a smart economic policy. Ironically, the USA, that did such a great job at this in the 1960’s and 1970’s, has been falling down in this regard. A significant reason for this is the USA can only fund so many things and a broken health care system, military complex, bailouts to bankers (trust fund babies and others) cost a lot of money. You chose what to fund, and those are taking much of the available USA funds. There are also non-economic reasons, such as the turn in the last decade in the USA to make the barriers for foreigner engineers (and others) to go through to go to school, visit and stay in the USA have all increased dramatically.
Back to the prospects for engineers: their are shortages of good engineers all over (and the future projections don’t show any reason to believe this will change). Germany Faces a Shortage of Engineers:
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Policymakers in Berlin have responded to the shortage of skilled workers with a number of measures, including changes in immigration rules that allow German companies to hire engineers from other countries, including those outside of the European Union. Among them: The annual salary that companies must pay foreigners has been lowered from 60,000 Euro (US $95,000) to 40,000 Euro, which is roughly the starting salary of an engineering graduate in Germany…
To make it easy for engineers to move around Europe, engineering associations and other groups across Europe are working with the European Commission (the executive arm of the European Union) to launch the new Engineering Card. The card, which German engineers can apply for now and other countries are planning to launch, provides standardized information about the engineer’s qualifications and skills for greater transparency.
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“We don’t expect many engineers will come, because among other reasons, there is a shortage of engineers across Europe,”
Related: Engineering Again Dominates The Highest Paying College Degree Programs – S&P 500 CEO’s: Engineers Stay at the Top – China’s Technology Savvy Leadership – Engineers: Future Prospects – Economic Strength Through Technology Leadership
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