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In the United States today, there is no more certain investment than a college education. In spite of the current gloomy economic forecast, college is still worth it. In fact, rising demand, coupled with the persistent undersupply of college-educated workers over the last 30 years, has driven up relative wages for these workers. On average, college graduates make 84 percent more over a lifetime than their high school-educated counterparts-up from 75 percent in 1999. While the current unemployment rate among recent college graduates is high (9 percent), it is still far lower than the average unemployment rate for recent high school graduates (35 percent). When it rains long enough and hard enough, everyone gets a little wet. Still, a college education is the best umbrella to shelter individuals from economic storms.
But that doesn't mean that all bachelor's degrees are created equal. While the focus recently has been on the value of higher education in general, we have failed to connect the dots between specific college majors and specific career trajectories. College offers many non-financial benefits, but there is new evidence of the oversize influence that certain majors have in preparing students for careers. Average salaries mask very real discrepancies between the economic advantages of different undergraduate majors. While everyone who attends college can expect a significant return on their investment, different undergraduate majors lead to markedly different careers-and significantly different earnings.
Disparity in Degrees
As we found in our recent study, What's It Worth?: The Economic Value of College Majors, because of the role it plays in occupational training, the choice of undergraduate major is as critical a choice as whether to get a college degree at all. In one of the most extreme examples, for instance, Counseling Psychology majors make an average of $29,000 per year, compared to $120,000 for Petroleum Engineering majors. That's a difference of 314 percent- or $4.1 million over a 45-year lifetime of work. A more typical example is the difference between two of the most popular majors, General Business and Elementary Education. A General Business major earns $60,000 annually, compared with $40,000 for an Education major. Over a lifetime, that's a difference in earnings of about $900,000.
Majors are so decisive for an individual's earnings because they are...