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Average starting salaries by major
Economics comes in 4th, with an average of $43,419.
Posted by Tyler Cowen on April 9, 2008 at 03:51 PM in Data Source | Permalink
Comments
I don't think computer programming deserved its own category there (a generic IT position would have been better), but I am glad that use engineers are (justly) rewarded more than you ner'do'well economists ;)
Posted by: Grant at Apr 9, 2008 4:39:59 PM
I also agree - computer programming should really be computer engineering with information technology being a separate field. I think you will find that non-programming IT people's salaries are a bit higher.
(as someone who doesn't have a degree i'm amused i made more than the highest starting salary listed at 18 over 15 years ago)
Posted by: yoshi at Apr 9, 2008 4:58:20 PM
I think the money business pays the most for new graduates ... modern measurable marketing, data analysis, operational research, statistics, econometrics ... those are the skills that we need.
However this knowledge of maths, of rational analysis, of critical thinking, of problem solving - it is often found in Engineers, hence the finding.
http://ranaban.blogspot.com/2008/02/what-career-should-you-choose.html
Hal Varian of Google suggested the same thing on Freakonomics.
Posted by: R N B at Apr 9, 2008 5:26:55 PM
A lot of similar information is available here (http://www.bls.gov/oco/) but you have to search for it a little bit.
Posted by: jsalvati at Apr 9, 2008 5:31:20 PM
Do philosophy majors earn less because they don't see the point in working hard for money? They are, after all, studying philosophy in college. And they may turn down high paying opportunities for the alternative of a light work, light pay, and more time to read and think.
As a former philosophy major who has done just that, I wonder how common such a "career choice" is.
Posted by: Mercutio at Apr 9, 2008 6:10:23 PM
I just saw a report on a geology website that showed that starting salaries for geologists, because of the recent spikes in commodity prices, is over $80,000. They still can't fill the positions.
Posted by: Gary at Apr 9, 2008 6:16:47 PM
Computer Programming isn't a major. Perhaps they mean Computer Science or Computer Engineering? Or one of the "business-y" fake computer majors?
Posted by: Andrey at Apr 9, 2008 6:28:25 PM
Yes, explain to me where law is? Is it missing because law isn't an undergrad dergee in the US?
Posted by: polly at Apr 9, 2008 6:32:22 PM
Yes, this only has undergraduate degrees. Law school is (almost?) always done as postgraduate work.
Posted by: Andrey at Apr 9, 2008 6:37:52 PM
"Do philosophy majors earn less because they don't see the point in working hard for money?"
No. Philosophy majors often double-major in undergrad, like me with physics. Oddly enough, my starting salary is about equal to a philosophy major + physics major (chemistry is closest).
Posted by: Anon at Apr 9, 2008 8:08:34 PM
Here's a puzzle:
If there is such a large expected (starting) wage gap between, say, philosophy majors and engineering majors, why would anyone major in philosophy? Since at American schools there is no cost related to choosing one's major, this seems very odd. Shouldn't we expect all major choices to be approximately equal in returns, at least in the long term?
Posted by: David Jinkins at Apr 9, 2008 8:22:20 PM
David,
Its a lot easier to major in philosophy (or similar subjects). As a previous poster noted, a lot of those engineers aren't necessarily going into engineering. Firms pick them up because they know they are smart and will work hard; other college degrees offer much less assurance of a potential employee's capabilities.
Gary, the commodities trader in me wants to use that information on the market. However, the Austrian in me hears that, looks at where prices have spiked after big recent interest rate cuts, and thinks there might be a bubble in geology.
Posted by: Grant at Apr 9, 2008 8:34:17 PM
I wonder if other social sciences are encompassed in Sociology. It seems the usefulness of in-depth, qualitative methodology is greatly undervalued, in my opinion... Or perhaps economics is greatly overrated.
Posted by: Ben at Apr 9, 2008 9:15:30 PM
Everyone's trying to excuse the low wages philosophy majors make, but c'mon, can you think of ANY job (not requiring postgrad study) that benefits from the specific skills of a philosophy major other than, well, philosopher? This is pretty important as far as starting salaries are concerned.
It's pretty obvious why people still major in subjects like philosophy or literature in this day and age, though: the class are both entertaining (you can argue anything!) and easy on the GPA (...and get an A for it). As anyone who's ever been 20 years old knows, most college students just assume they'll figure it out later with regard to things like this.
Posted by: Sean at Apr 9, 2008 10:32:50 PM
An interesting comparison is GRE scores. Quantitative scores seem to track pretty well with salary, with the exception notable exception of philosophy. GRE scores here, with philosophy helpfully highlighted
http://www.ncsu.edu/chass/philo/GRE%20Scores%20by%20Intended%20Graduate%20Major.htm
(Full Disclosure: I'm a philosophy undergrad who became an econ graduate student)
Posted by: PLW at Apr 9, 2008 10:48:04 PM
Yoshi,
No-degree (or non-science degree) is weirdly a pretty strong signal in the programming world. Especially for those with a few years of programming work under their belts or personnal recommendations.
Half the CS billionaires dropped out of schol without a degree, and many of today's top business-focused hackers are degreeless. The lack of degree often means the person hates doing anything that is not on the productive path - a good thing for startups and Wall Street, etc.
The signal thing only works because great programmers can evaluate each other very rapidly on technical merit. We need 10+ hours to decide on a candidate, and techical merit is typically understood within the first hour.
Posted by: gorobei at Apr 9, 2008 11:07:57 PM
It seems that many of the above comments seem to assume that higher-paying majors are more difficult -- hence this notion that something like philosophy is "easy." Can you support this claim?
Is difficulty measured by the grading? (If all but one student in a gym class received "F"s would that make it more difficult than an econ class that had a normal distribution?)
Is it measured by the intellectual difficulty? If so, how is that measured? Hours worked? Even if it's busy work? Amount of overall thought? How would that be quantified?(I certainly found my undergraduate philosophy classes to be much more difficult than my undergraduate econ classes. For that matter, "soft" sciences and humanities are in many ways more difficult intellectually than "hard" sciences, which have fairly cut-and-dried answers and procedures.)
To be honest, I'm not expecting any enlightened answers to the above questions. In fact, I don't think there's much correlation between the difficulty of a major (however it's measured) and its pay. People don't choose majors purely on how much they'll make in the long run. And majors are not rewarded economically because they're difficult. They're rewarded because they're marketable right now (i.e. someone can make money off of the work you do for them because of some skill you have due to the major). And, with some majors, such as business, I think the whole signaling/credentialing aspect of a degree is more true than the skill argument I just made. After all, business is not a very difficult major compared to the majors required for many jobs listed below it, and -- though I can't find the study right now that put business majors below those in the social sciences, hard sciences, fine arts, and other professional programs in terms of their overall cognitive ability -- business majors are not exactly known as the brightest bulbs on most campuses.
Posted by: ? at Apr 9, 2008 11:29:12 PM
The short term prospects of an engineering degree are certainly attractive.
But from my experience with older engineers, the long term prospects can become dismal with firms often opting for younger employees with fresher knowledge.
Posted by: thehova at Apr 10, 2008 12:28:51 AM
Is it really easier to major in a subject like philosophy than history, which finished higher up on the list?
As a history major, I don't think so.
My guess is that the personalities of history majors might excel better in a business environment than those of philosophy.
Posted by: thehova at Apr 10, 2008 12:35:35 AM
? - look at the chart. The high-paying, fresh out of college, jobs are going to those who have majored in areas that require objectively correct (or at least good) responses to problems posed.
Probably not a great predictor of earnings ten years down the road, but a strong measure of who gets paid fresh out of school.
I know a lot of philosophers who were failed physics majors, very few vice versa :)
Posted by: gorobei at Apr 10, 2008 1:20:21 AM
It's pretty simple really, wages are positively correlated with how boring a subject is, so that the marginal undergrad will be indifferent between all careers.
Posted by: at Apr 10, 2008 2:31:57 AM
I can think of two reasons that justify the salaries of the higher paid jobs.
first, as gorobei mentioned, people tend to vote with their feet in choosing majors. many people start out as science major, and decide they dont like it/it's too hard, and then end up majoring in something else. but not many people start out humanities and decide they dont like it/too hard, and become a science major.
the other is that many of the jobs right out of school available for undergrad science majors (quality control, research labs) require you to do the same test over and over, and it gets tedious after the first week or so. I'm a biochemistry major right now. After college, if i get a job testing bottles of salad dressing at the Heinz plant, that doesn't teach me any new salable skills. In fact, it'll probably require me to spend 2 hours per day outside work just to keep up the skills i learned in college. so the paycheck looks a little less enticing for 10 hours/day instead of 8 hours/day
I'm surprised that biology and psychology aren't included in the list
Posted by: jollyjl at Apr 10, 2008 2:45:20 AM
To respond to many of these points, but in particular to David Jinkins's question: "Why would anyone major in philosophy? [...] Shouldn't we expect all major choices to be approximately equal in returns, at least in the long term?":
I think that, in the long run, the philosophy major will often earn as much as - or more than - the engineering major, if they are motivated by money. The majors at the top of the list have one important thing in common, and it has nothing to do with how difficult or boring the major is: they are the closer on the spectrum to vocational training than humanities or social science (ex. econ) majors are. Engineering and computer science are job skills that can be put to use right away, without significant additional training, and there are lots of companies hiring for those specific job skills. So they start out at close to $50k, but unless they go to b-school they're unlikely to have significantly increased their income ten years after graduation.
Compare the philosophy or English major - as my English-major friend said during the college job search, "Those English firms just ain't hiring." So the English and philosophy types take a hit at the start. But graduate schools highly value what they've learned, and they tend to do quite well in law school and b-school. (They also do very well on entrance exams: see the related statement in the NY Times link at the end of this comment.) Many of the best lawyers, and all of the best investment bankers and PE execs, with whom I've worked have been social science or humanities majors. Philosophy majors in particular stand out. My subjective experience has been the same: of my college friends, those with the highest incomes were, without exception, humanities or non-econ social science majors. The comp sci, econ and engineering majors made way more right out of school, but they were passed by long ago.
I also would imagine that humanities majors are more likely to go into professional school - perhaps since they're earning less and so have more to gain long-term, and less opportunity cost - but I don't know whether statistics back that up.
Finally, don't discount the fact that some people just like the education for its own sake and don't choose majors based on income-related considerations at all. So to really determine the answer to your question, the returns would need to be measured by something more than just income.
http://www.nytimes.com/2008/04/06/education/06philosophy.html?scp=1&sq=philosophy+major&st=nyt
Posted by: bcw210 at Apr 10, 2008 5:13:48 AM
David and ?,
Risk and reward. Yes, engineering is harder. On my campus, chemical engineering was well known as the hardest major. Why is it harder? Because they take pride in making it harder.
Many people dropped out to go into education. Why education? My theory is that engineering prospects are practical, so they wanted something fairly assured.
Now, just like being a really good manager at McDonald's, philosophy can be hard if you make it hard on yourself to be the best student in the department. But, that is hard due to competition, like being in a commodity business is hard. Because so many people can call themselves philosophers there isn't much leverage with the customer for philosophy services.
I think something like Art can be hard because it's like a consumer branded business. Not much competition, but you have to stay creative to keep giving the customer something new and exciting. The customer doesn't need your product, you have to make them want it.
Engineering is hard like making pharmaceuticals is hard. It's just hard. And because few can do it, the consumer for engineering services has to pay up.
Just my 2 cents.
Posted by: Andrew at Apr 10, 2008 6:24:13 AM
How 'bout this.
Starting salary correlates pretty well with specialization.
The high starting for engineering is a bit of a trap, I think due to the high specialization. It's risk vs. reward. You are guaranteed a good salary as an engineer, but your specialization, especially after a few years of employ, limits the number of customers. So, you flat-line pretty fast.
A philosophy major has almost no immediate customers, but their doors are wide open for future specialization. So, some turn out to be billionaires and some end up working in the used record store.
It's not a tight correlation. I for example knew I didn't want to do engineering, but took it because it was hard and provided a "margin of safety." I'm much more interested in econ and philosophy as a calling. Engineering pays the bills.
Posted by: Andrew at Apr 10, 2008 6:30:52 AM
One last thing.
Employers like degrees because it limits their risk. Because engineering is such a weed out program, that is remarkably standardized from campus to campus, the business knows exactly (or almost) what they are going to get.
Maybe an employer of philosophy graduates may have to hire 5 to get what he's looking for. The one who is still there a year later may get bumped up substantially, depending on the business they are in.
Being a risk-taker, if I were an employer, I might roll the dice on some philosophy grads. Lots of engineering businesses are too conservative to do this.
Posted by: Andrew at Apr 10, 2008 6:35:44 AM
Okay okay, really the last thought.
Off topic, way off topic, but I went to the Hal Varian post referenced by R N B and read this.
Q: In 2001, you wrote, “The reason for the California electricity crisis can be summed up in four words: demand grew, supply didn’t.” Given the evidence of market manipulation by Enron and others, do you still think the reasons were benign market forces, or something more sinister?
A: I think that the failure to invest in generation and transmission facilities led to a system that operated very close to capacity. This allowed for unscrupulous traders to push the system over the edge on some occasions. As such, I would still argue that it was lack of capacity expansion that created the environment that enabled manipulation.
To me, this sounds like a brilliant observation, which explains some of the constant political conflict. Supply-tight periods on commodities amplify the marginal impact of a few, normally insignificant, misanthropes. Consider the ubiquitous price gouging debates after every crisis. The real problem is getting close to the edge of the cliff, not the little nudge that pushes us over. But it's always the nudge that gets all the attention. Seen versus unseen all over again.
Posted by: Andrew at Apr 10, 2008 7:17:03 AM
Speaking as somebody who was an engineer, I find some of the thoughts here a little absurd.
Thehova: most engineers are working as managers ten years after graduation, so your "old folks getting replaced with fresh knowledge" theory is odd. Secondly, the knowledge doesn't change that quickly. Chem E textbooks today are the same ones I used 20 years ago and the same ones my profs used 40 years ago. Today's students have more tools at hand, but people in industry also learn to use those tools. The few engineers that stay on the technical side for 10-15+ years are greatly coveted for their institutional knowledge and experience, the "having seen it all before" factor. If you're a 10 year engineer who can be replaced by a new grad, you haven't done a very good job of advancing yourself. But that's rare: most engineering societies these days have a strong "lifelong learning" push.
Hiring is cyclical in engineering, but if you enter during an up-cycle and get a few years under your belt before the next downturn, you're basically set for life.
Now, as to whether engineering is "harder" than philiosophy, well, it certainly requires more hours in the classroom. Many semesters I had six 3-credit courses with 3 or 4 of them having labs, resulting in 28-32 hours of classroom/lab time per week. Many of my friends in humanities had 12 hours per week. There was more homework, more quizzes, more studying. Now, as to whether learning to solve differential equations or model the flow through a distillation column is more intellectually taxing than wading through Nietzsche or Kirkegaard, well, I guess that's more a question of aptitude, and not skill.
FWIW, those of us in ChemE thought that EE was a "tougher" program. Maybe it was those imaginary numbers that scared us. But we probably put in more hours.
That said, I found my econ Ph.D. classes to be much more difficult than anything I ever studied in the hard sciences. But at the end of the day, it's the quant skills that pay the bills. I get paid to crunch data and analyze the results, and there's little "philosophy" in that.
As to humanities people doing better as investment bankers or PE deal makers, well, those are professions that reward the ability to generate a lot of verbal bullshit, so there is a natural fit.
Posted by: Bartman at Apr 10, 2008 9:23:52 AM
To me Econ is a nice mix of good starting salary and good longterm upside.
It requires both quantiative and some verbal reasoning skills, provides some tools that you can use immediately but also some theory and general knowledge. Is intellectually difficult enough to seperate you from the pack but is not really that much work like engineering.
Plus it sets you up for a business/finance/consulting type career that pays well or a government job with relatively high earnings and lots of perks. Plus it is good training for a number of greaduate programs.
I started school as a math major and transfered to econ. I regreted it for a while (even though I really enjoyed econ) but now I am really glad with the choice. My wife an engineering grad agrees with me. She thinks Econ is a great major and kind of wishes she had done something other than engineering even though she has had a really nice career so far.
Posted by: eccdogg at Apr 10, 2008 10:44:53 AM
(1) A more useful chart would show how much people make 10 years after they graduate, and not in their first job. (2) I doubt that economics majors are actually working as economists. They are mostly doing something business-like, and people hire them because economics sounds business-related to the layman.
Posted by: Half Sigma at Apr 10, 2008 1:35:15 PM
I must have been hedging my bets...I have a CS degree with a Philosophy minor. The philosophy doesn't come up much at work, but can get philosophical about how much money I make.
Posted by: TripAZ at Apr 10, 2008 3:22:03 PM
>>So they start out at close to $50k, but unless [computer science majors] go to b-school they're unlikely to have significantly increased their income ten years after graduation.<<
If you get a computer science degree and are actually good, you should be able to make far more than these numbers. Almost everyone at Microsoft, Google, Amazon, Yahoo, etc, starts out at around $80k-$90k. In 5 years its common to be making about $140k.
If you work in the financial sector, salaries can be much higher. Some companies offer starting salaries of over $200k to new graduates. With several years of experience you can be making over $500k as a developer if you only care about money.
I would be amazed if the average salary of philosophy majors 10 or 20 years after graduation was anywhere near that for computer science majors. You mention the PE execs and investment bankers you know who were philosophy majors. How sure are you that they represent anywhere near the average case 10 years after graduation? If we're just picking the most successful philosophy majors that we know, then let's compare them to the abundant software millionaires and billionaires our there who majored in CS.
Posted by: Flossy at Apr 10, 2008 3:34:53 PM
One final comment here - I agree with many of those above.
But I am not joining with all those who compare final engineers' salaries with other professions, I think that point is less relevant, as are the exceptional self-made billionaries, and I don't want to enter discussions about whether physics is harder than philosophy.
The engineering degree, if from a respected institution, is a signal to the business world that the graduate can apply theoretical algorithms to real world problems, can crunch the hard numbers, can analyse a lot of variables and rationally draw the optimal conclusions. Those are skills that Hal Varian wants at Google and those are skills that investment banks want in hedge fund management.
Posted by: R N B at Apr 11, 2008 5:32:44 AM
Flossy - I accept your point. My point, which I suppose I wasn't too clear about, was that (a) starting salaries are not a good indicator of success and (b) a philosphy degree can still be quite useful in "the real world" - i.e., even if one cares about earning potential, a philosophy or English major isn't necessarily a bad choice, if you look beyond the short-term. The examples of friends and people I've worked with were meant only to show my subjective experience of the fact that people with philosophy and English degrees can do quite well for themselves.
I wouldn't doubt that the *average* salary of comp sci majors is still higher 10 years out - but if we compare groups of people with similar intelligence and motivation, then I'm not so sure that the comp sci/engineering people and the humanities people will be any different. It's hard to compare the small number of comp sci graduates with the massive number of humanities and social science graduates - especially since the "humanities/social sciences" rubric contains a lot of majors that unmotivated slackers end up in, or that people who failed elsewhere fall into as a back-up major. (As others have pointed out, you're not likely to end up in comp sci or physics as a fallback.)
I suppose that when I said in my first post that "in the long run, the philosophy major will often earn as much as - or more than - the engineering major, if they are motivated by money" I should have added "and is equally as intelligent and motivated as the engineering major." Not controlling for that variable gives you a pretty skewed view of the value of the major. Otherwise, we're measuring the potential of the people who are attracted to the major as much as we're measuring the education that they receive.
Bartman, I am somewhat disconcerted by your characterization of i-bankers and PE types, but am far too amused by it to quibble with you. (By the way, I am neither of those, nor am I a philosophy major, so I don't have a horse in this race. I just think that it's very unfortunate that so many people think that they need to earn a degree in "something useful" and neglect the value of a humanities education in favor of job training.)
Posted by: bcw210 at Apr 11, 2008 8:13:54 AM
bcv: the description posited of IB types is not my own - I know precious few - but that of some Wall Street quants I know, who do work with i-bankers. They generally perceive that they do all the heavy lifting (valuations, etc.) and the bankers get the publicity and big bonuses for merely being the "deal-makers".
Posted by: Bartman at Apr 11, 2008 9:32:29 AM
I got an engineering degree. It was very difficult and very worthwile, but I always knew if I wanted an easy 4.0 average I could switch majors to philosophy or psychology. That is why I myself, and most people in the hard sciences, find those degrees soft. Engineering was a daily challenge, from the classes I took in those other subjects I know that if I was majoring in any of them I could sleep my way through them and wake up with a degree. The engineering students may not have been at the top of the list on the GRE's, but we have been trained to take other tests that are more reflective of our skills, that those majoring outside the hard sciences could not score two points on.
Posted by: Phil at Jun 22, 2008 9:01:22 PM
