According to the National Center for Education Statistics, undergraduate enrollment increased 37 percent between 2000 and 2010. This is the fastest rate of enrollment growth in higher education since the baby boom generation entered college in the 1960s. Research also suggests more students than ever are pursuing fields that can lead to successful careers and bigger paychecks. Both traditional and non-traditional students seem to share an immediate economic motivation to pursue a postsecondary degree. As a result, the demand for higher education continues to grow, despite, or perhaps because of, a tight job market. While unemployment remains unacceptably high, it is the better educated who are finding work.
Given the data which enables us to quantify the economic benefits of postsecondary education, this increasing demand, despite increasing costs, is not surprising. A number of recent studies indicate that the majority of individuals benefit economically from obtaining a college degree and, in almost all cases, these benefits increase with each additional level of education. The Center on Education and the Workforce at Georgetown University calculates those with a bachelor’s degree will make 30 percent more over their lifetime than those with an associate’s degree, and 70 percent more than those with only a high school diploma. The Center’s research has also shown that the vast majority of job growth over the last 35 years has been in positions that require some sort of postsecondary credential. Employers across the nation need a trained workforce to meet 21st-century industry demands. To meet these needs, the President along with foundations and associations across the country have committed to very ambitious goals for increasing the postsecondary attainment rate over the next 10 years — and students have responded.
Students interested in gaining economic benefits from their degrees should pay attention to employer demand in the job market. From an economic perspective, not all majors or fields of study are created equally. A recent State Higher Education Executive Officers (SHEEO) Association study found that wage premiums vary greatly across sectors and degree levels. Degrees in the sciences, health and Science, Technology, Engineering and Mathematics (STEM) fields have the highest median wages and wage premiums over a high school diploma. Education and trades occupations have similar wages for a bachelor’s degree, but education has one of the highest wage premiums over high school while trades occupations have one of the lowest. Finally, arts and humanities and social and behavioral sciences have lower wages and wage premiums at the bachelor’s level but high wage premiums for a graduate degree. Clearly there are differences across academic majors and levels of credential.
Much of this information is not new; when I made my own school selection years ago, the evidence was equally clear: engineering degrees paid more then, and they still do now. So why did this analysis also find that, despite efforts by policy makers to increase them, degree production in the STEM disciplines has not increased as rapidly as it has in other fields over the last five years? It may be because the choice of a degree program is complex and factors such as location, time and personal preference play a role. Differences among states suggest state economies vary greatly. When considering future employment options in a given career field, students must also consider whether the economy of the state or region they live or plan to live in supports jobs in that field. Additionally, demand changes over time; 20 years ago, there were very few jobs in petroleum engineering but, today, those working in this field are among the highest earners nationally. Students must consider these kinds of economic changes and focus on fields that will offer them transferable skills.
Students must also consider the time and resources they’re willing to put into their education. For example, is a student willing to obtain both undergraduate and graduate degrees to earn a higher wage in a social science field? But, perhaps most importantly, students should also select fields they find interesting and know they can succeed in. Pursuing a career that does not match interests and abilities often leads students to drop out. Even if they do complete their programs, they are much less likely to succeed in a career that doesn’t interest them or that doesn’t fit their skills.
Thankfully, institutions are doing more to provide information to help students make this decision. Some are offering industry information as part of their counseling process to help students understand what opportunities may be available to them at graduation. Career and counseling centers offer tools to help students assess where their individual talents lie. Additionally, national organizations, like the Bureau of Labor Statistics or the Census Bureau, and local economic development organizations are doing more to create easy reports that can help inform potential students of their options.
You can access more information on SHEEO’s analysis on the Economic Benefits of a Postsecondary Degree here.
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