Your college major can influence your pay. Here are the best and worst majors.
College students are encouraged to pursue their interests, ranging from aerospace engineering to theology. But those choices can have a profound impact on their job opportunities and career earnings, with some grads enjoying much higher incomes than others, according to the Federal Reserve Bank of New York.
It's no surprise that the top-earning college majors are in so-called STEM fields, or degrees in science, technology, engineering and math. The lowest-paying college majors are in areas such as theology, social services, the performing arts, education, and leisure and hospitality, the data shows.
Some workers with majors correlated with higher pay could potentially outearn their classmates by hundreds of thousands of dollars in the two decades after graduation — an issue that may sway some students' decisions about their studies. Enrollment has plunged in some lower-earning majors such as education, where the number of bachelor's degrees has fallen 19% since 2000-01, according to the Pew Research Center.
"There are just very large differences in labor market outcomes depending on your major," Richard Deitz, an economist at the New York Fed, told CBS MoneyWatch. "The data can be extremely valuable in helping people make decisions about what they want to major in."
To be sure, urging a teen to study engineering when they want to become a teacher is no guarantee of financial success, and may in fact have the opposite effect. For instance, an engineering grad might possess a potentially valuable degree, but struggle professionally if they lack any aptitude for the profession's requirements, or simply be a recipe for misery.
"It may push students into making decisions that aren't right for them or into majors they might not be successful in," Deitz said.
Instead, the data could be used to help a college student who is interested in math decide between one of several math-related fields, or an educated-minded student make a similar choice.
Fields where income can grow
Even though new grads start off their careers with income gaps by major — ranging from a low of $36,000 a year for theology majors and topping out at $75,000 for chemical engineering majors — some fields potentially offer much more income growth by mid-career (when workers are 35 to 45 years old), the NY Fed analysis found.
For instance, industrial engineering and chemical engineering majors start their careers at similar median annual incomes — $70,000 and $75,000, respectively. But by mid-career, the chemical engineering major will have a median pay of $120,000 — $20,000 more annually than an industrial engineer.
By contrast, some majors often see very little income growth by the time graduates reach their mid-career years, such as early childhood education majors, who start at $40,000 and reach only $43,000 by their late 30s and early 40s.
Is a college degree worth it?
College enrollment has slid during the pandemic, with experts citing the impact of the health crisis as well as a rise in skepticism about whether a college degree is worth the cost.
Overall, college grads outearn people with only a high school diploma — but that's not the case for everyone, economists note. For instance, some college grads at the lower end of the spectrum may earn roughly the same as their classmates who didn't pursue higher education.
With the high cost of college, including the burden of student loans, that raises the question of whether college is suitable for everyone. Still, college grads tend to have a lower unemployment rate than people with only a high school education, with the jobless rate standing at 2% in January for college grads versus 3.7% for those with only high school degrees.
The share of "underemployed" college grads — or those who are working in jobs that don't require a college degree — adds nuance to the analysis of the value of a diploma.
Notably, some low-paying jobs have low rates of underemployment, such as education. In other words, grads with a teaching degree are almost certain to find an education job, with elementary education majors having an underemployment rate of 15%, according to the analysis.
But 64% of performing arts majors are underemployed, a sign it may be more difficult for them to get a foothold in their chosen field.