While it’s important to study what you love, it is also useful to consider your future opportunities when choosing a major. Salaries and unemployment rates vary widely among majors. And when we add the possibility of going to grad school into the equation, things get even more complicated.
In this post I will discuss data from a paper by Akbari and Aydede that examined the earnings potential and unemployment for a plethora of college majors using micro data from Canada.
While some things might be particular to Canada, in general there’s no reason to expect that these results won’t hold for the United States or any other developed country. The main caveat: the data is from 2005. This is not a huge issue for most majors, but there could be some industries that have experienced a boom or bust since then.
Hourly wages by major from best to worst:
If you prefer job security, then check out the unemployment rates, from best to worst:
I constructed a composite index that is the unweighted average of the majors rank in wage and unemployment (e.g. if 2nd best in wage and 6th best in unemployment, then average rank is (2+6)/2 = 4).
The correlation between wage and unemployment is -0.46. This indicates that for the most part occupations with a good salary have low unemployment rates too. Indeed the median of the differences between rank by wage and rank by unemployment is only 9; indicating that a great number of majors rank similarly according to both criteria.
A profession with better unemployment than wage would be one where unemployent is kept low (probably because almost all graduates are hired straight out of school, like in the case of education or religious things), but wages are kept low because the graduates are mostly hired by public institutions and similar (like churches) with limited budgets. Examples include Biblical Studies, Agriculture, Human Services, Legal Services, Parks and Recreation Services, Education, Aeronautics or Psychology.
In the converse case, the profession has high wages and high unemployment. This could be the case in professions where only a limited number of individuals are needed (hence the high unemployment), but they entail a very high level of responsibility (hence the good remuneration). These include: Religious Studies (I don’t know why either), International Relations and Affairs, Political Science, Liberal Arts and Sciences or General Legal Studies.
Thinking of going to graduate school? Here are the wage differences (in %) of selected majors relative to an economics major, only graduate degrees count:
Going to graduate school appears to pay off handily for business majors. A somewhat unintuitive thing, because in most areas of business there really isn’t so much to learn for graduate school to be useful (with the notable exception of finance). Perhaps the reason is not the education received per se, but the positive selection of the most gifted and motivated business people into graduate programs. The connections made in prestigious MBA programs cannot be underestimated, either.
After business majors comes economics. Given the heavily research-oriented nature of economics, it is no surprise that there is a great premium to be had for going to graduate school.
In conclusion, what did we learn?
It always pays off to learn math! Heavily math-oriented majors such as Finance, Engineering, Accounting, Physical Sciences, Economics, Mathematics and Computer Science rank very high according to all criteria. If you don’t like math, you should give it another chance. If you still don’t like it, go for business or law.
Job security in the public sector. Jobs with high public sector hiring like Education, Military Technologies or Parks and Leisure Services tend to have low unemployment rates. You would have to settle for a lower salary, but your job would probably be very safe.
Get an MBA. Whether it’s well-deserved or not, business majors who went to graduate school have the best wages out there.
Reconsider before taking a useless major. No offense intended but those who are studying Precision Production (this one should be in a much better shape in some other more manufacturing-centered developed economies though), Area, Ethnic, Cultural and Gender Studies (haha), Archeology or Communication among others should seriously consider a double-major or a graduate degree in a different field (like business, law or medicine) at the very least. Otherwise, they’ll be in for a very rough job market.
And of course, you can come up with plenty of other conclusions based on the charts above (and the paper).