Major Decisions: What Graduates Earn Over Their Lifetimes

from Brookings

In late 2014, The Hamilton Project released two economic analyses and interactives on the earnings of college graduates by major: one set that showed career earnings profiles and lifetime earnings and another that showed an undergraduate student loan repayment calculator.

Both were—and still are—very popular because they provide useful and actionable information to college students who are trying to make choices that will affect them for years. To remain useful, these data needed a refresh. We have updated the data in both interactives to use earnings from 2014-18, and we have also expanded the number of majors available from 80 to 98. The updated interactives can be accessed on The Hamilton Project website: career earnings profiles and lifetime earnings and undergraduate student loan repayment calculator).

More here.

Posted in Careers, Education and tagged , , , .

2 Comments

  1. Throughout High School, I never gave any thought to what I wanted to do with my life. Since I did not have the option to choose which classes I took, there was no way for me to find something I was interested in. Unsurprisingly, I still have not declared my major, but I have come close to finance on multiple occasions. This is not because I have a deep-rooted interest in finance, it is because that is what my dad has experience with, and there is potential for me to make a lot of money. However, the more I research and educate myself, the more I see that every major provides an opportunity to make an abundance of money. There is no major that will guarantee that you will become rich. As this article states, the top tenth of economics graduates earns more than ten times over their career what the bottom tenth earns. Because earnings vary so much within each major, it would be a mistake to choose a major solely based on earning potential. I always believed that money equaled happiness and that if I made a lot of money, I would have nothing else to worry about. However, this idea is fading. Although I do want to and plan on making a lot of money, it is not everything.
    However, I still do believe that some majors are a dead end. I have friends who became communications majors because they love sports. I am not saying that you should ignore your passions, but it important to recognize and accept that a passion might not be enough to make a career. Again, there are sports broadcasters who make millions per year, but even well-known ESPN broadcasters do not make over 60K a year. Another important thing to monitor is the outlook for your job. If there has been a steady decline and that trend is going to continue, it is probably best to avoid that job. An average job growth rate is between 5 and 8 percent. Anything lower than that should be a cause for concern. Deciding what you want to do with your life is a huge decision, but there is always time to change your mind and do what makes you happy.

  2. Choosing one’s major in college or even the act of choosing to receive some form of higher education or enrolling in trade school is the first step in joining your new socioeconomic class. This choice which almost everyone makes when they are 18 years old begins the process of stratification and slots people into their respective strata. Not all occupations and career paths are created equal. They all are assigned different levels of financial compensation as the market values each type of job differently. Job pay increases in order to increase demand for a job. So, if a job is difficult to complete, it will pay higher than a job which is less difficult to complete. If a job requires advanced degrees and certification, it will pay more than a job which does not have a high barrier to entry. If a job involves handling toxic waste or other dangerous chemicals, it should pay more than a job which would not require workers to subject them to these hazardous conditions. A fair market rate for a job is determined by analyzing all of the above factors and countless others. Ultimately, a jobs pay is determined by the amount of compensation required to obtain workers. If people don’t want to apply for a certain, then employers need to raise their compensation and benefits in order to try to attract workers. The cost of living in a certain part of the country also influences how much someone gets paid to work for company. This is determined by the market as well, however compensation does not balance out perfectly to match living expenses. Working in many urban areas, where salaries are high as a result of the high cost of living, allows people earn significantly higher salaries than if they were working in the country or suburbs. However, there employees may actually net less, than others who work in more affordable parts of the country. The employees with the highest salaries and “the best jobs” might net less money than others as they have more and higher taxes, higher rents, increased prices for food, homes, and other goods. This fact of life should provide hope to others who think they need to compete for “the best” and most prestigious jobs. There are many ways for people to get ahead in life, and no single path to become successful. While some careers and industries are more likely to lead to a higher accumulation of wealth than others, financial success is possible in each industry. Workers need to find the right path for them, and research jobs which pay well in their industry. This is a great way to begin the process of determining the best career path for oneself. It’s also important to know that salary does not need to be the only way a person obtains their income. Investments in the forms of stocks, bonds, and rental properties can help create flows of passive income which help support a family’s financial needs.

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