Patterns in college major by parent’s income

College students with parents with higher incomes study different subjects:

Once financial concerns have been covered by their parents, children have more latitude to study less pragmatic things in school. Kim Weeden, a sociologist at Cornell, looked at National Center for Education Statistics data for me after I asked her about this phenomenon, and her analysis revealed that, yes, the amount of money a college student’s parents make does correlate with what that person studies. Kids from lower-income families tend toward “useful” majors, such as computer science, math, and physics. Those whose parents make more money flock to history, English, and performing arts.

http://www.theatlantic.com/business/archive/2015/07/college-major-rich-families-liberal-arts/397439/
The explanation is fairly intuitive. “It’s … consistent with the claim that kids from higher-earning families can afford to choose less vocational or instrumental majors, because they have more of a buffer against the risk of un- or under-employment,” Weeden says. With average earnings for different types of degrees as well-publicized as they are—the difference in lifetime earnings among majors can be more than $3 million, one widely covered study found—it’s not hard to imagine a student deciding his or her academic path based on its expected payout. And it’s especially not hard to imagine poorer kids making this calculation out of necessity, while richer kids forgo that means-to-an-end thinking.

Another trend expressed in the data, Weeden notes, is that lower-income families and higher-income families tend to send their children to schools with different options for majors: Most of the priciest, top-tier schools don’t offer Law Enforcement as a major, for instance. There is also the possibility that children from higher-income families were more exposed to the sorts of art, music, and literature that colleges deem worthy of study, an exposure that might inspire them to pursue those subjects when they get to college…

From this angle, college majors and occupations start to look more and more like easily-interpreted, if slightly crude, badges doled out to people based on the wealth and educational levels of the parents they were born to. There’s a reason that the first question asked at parties is often “So, what do you do?” “If we tend to avoid asking acquaintances about their income,” four prominent sociologists wrote in the 2011 anthology The Inequality Reader, “it’s not just because doing so is viewed as too intrusive and personal but also because we suspect that querying about occupation will yield more in the way of useful information.”

Four quick thoughts:

1. Of course, what majors actually lead to what jobs is not as clear as people might make it out to be. Just because someone has a particular major doesn’t mean that is where they will be working in 10 or 20 years. At the same time, some majors might lend themselves to particular jobs right after college.

2. Outside of an associate’s degree, the majors with the lowest parent incomes (top of the chart) are helping professions. This might indicate a bigger interest in wanting to work with people or directly give back to the community. Reading uncharitably, do the majors with higher parent incomes lend themselves to a certain distance from people?

3. It is interesting that sociology, political science, and anthropology are higher up on the list of parent’s incomes. Students sometimes seem to suggest that these are luxury subjects – interesting perhaps (if they don’t think it is just common sense) but too difficult for finding a career.

4. This would all make sense in Bourdieu’s ideas about social class. Those with less economic capital tend to favor more functional items while those with more capital lean toward the abstract. Why should college major be exempt from the powerful organizing forces of social class?

Nobel Prize winning economist Gary Becker on the difficulty of sociology

The authors of Freakonomics and SuperFreakonomics are primarily interested in economics but they do make occasional mention of sociology. Here is one example involving the Nobel Prize winning economist Gary Becker describing his own life (page 15 of the deluxe edition):

“I began to lost interest in economics during my senior (third) year because it did not seem to deal with important social problems. I contemplated transferring to sociology but found that subject too difficult Fortunately, I decided to go to the University of Chicago for graduate work in economics. My first encounter in 1951 with Milton Friedman’s course on microeconomics renewed my excitement.”

Two things stand out:

1. Sociology is about social problems. This is a long-standing part of the discipline and the reason many introductory level college classes in sociology are about social problems. At the same time, this tends to portray sociology as more as an activist discipline – which it may be, depending on who you talk to – and less of a scientific enterprise.

2. Though he doesn’t say why, Becker suggests sociology was “too difficult.” From a smart guy, this is a nice hint that sociology isn’t just common sense. Society, groups, interactions, and individuals influencing each other leads to a complex set of theories and methods.

Who can predict job growth by sector in the next 10 years if the BLS can’t?

Derek Thompson points out that 2002 predictions by the Bureau of Labor Statistics about job growth by sector for the next ten years turned out to be quite wrong:

What did BLS get right? At least two things: the unstoppable growth in health-care jobs (which it expects to continue) and the steady growth in leisure and hospitality.

What did it miss? Everything else, in particular (a) the boom in mining, led by the natural-gas revolution, (b) the utter collapse of the publishing industry, and (c) the Great Recession, which wiped out half-a-decade of economic growth. BLS thought we’d create 20 million non-farm jobs last decade. We created about six million. That’s a 13-million-job gap. 

Essentially, the BLS failed to anticipate the real-world surprises, which is another way of saying it is not psychic. It extrapolated the recent past (health care was expanding, housing was booming, the economy was recovering from a mild recession), baked in global and demographic trends, and voila, put out a plausible projection of the next ten years. This is a perfectly sensible way to predict the future. But then the real world intervened.

This isn’t supposed to be a post about how the BLS forecasting models are bad. It’s supposed to be a post about how predicting the future is impossible, even though predictions play a starring role in discussions about finance and government.

I think Thompson draws the right conclusions here: it isn’t necessarily about jobs but more about the difficulties governments and other organizations have in predicting even ten years into the future. The world is a complex place and this should push us to think about what we can know moving forward. This would be a great point to inject the writings of Nassim Taleb who has argued in several books that this is a huge problem: there are plenty of people, like on Wall Street or in Washington, who think the future is clear enough to risk a lot. Granted, the BLS isn’t going to lose much if their predictions are wrong but it could have a big effect on others. One example: students looking at what majors to select. In recent years, there are more and more articles that talk about the job fields expected to grow in the future. The argument is that students need to make sure they study for employable careers, particularly with rising college costs. But, they may pick a college or a major based on predictions that aren’t necessarily correct. Perhaps this lack of predictive ability is a good argument for liberal arts schools.

Knowing the difficulties of making long-term predictions, what can the average citizen do? Taleb would suggest hedging our bets, perhaps risking some when the negative effects won’t be that bad. (Taleb lays out this investing strategy in Antifragile: put a good amount of money in safe investments and then risk some in places where the payoff could be huge but you aren’t going to lose much if it doesn’t pan out.)

Virginia Postrel takes on typical arguments about worthless college majors

Virginia Postrel counters arguments that many American college students are studying subjects that don’t matter and won’t help them find a job:

According to the National Center for Education Statistics, humanities majors account for about 12 percent of recent graduates, and art history majors are so rare they’re lost in the noise. They account for less than 0.2 percent of working adults with college degrees, a number that is probably about right for recent graduates, too. Yet somehow art history has become the go-to example for people bemoaning the state of higher education.

A longtime acquaintance perfectly captured the dominant Internet memes in an e-mail he sent me after my last column, which was on rising tuitions. “Many people that go to college lack the smarts and/or the tenacity to benefit in any real sense,” he wrote. “Many of these people would be much better off becoming plumbers — including financially. (No shame in that, who’re you gonna call when your pipes freeze in the middle of the night? An M.A. in Italian art?)”…

The higher-education system does have real problems, including rising tuition prices that may not pay off in higher earnings. But those problems won’t be solved by assuming that if American students would just stop studying stupid subjects like philosophy and art history and buckle down and major in petroleum engineering (the highest-paid major), the economy would flourish and everyone would have lucrative careers…

The critics miss the enormous diversity of both sides of the labor market. They tend to be grim materialists, who equate economic value with functional practicality. In reality, however, a tremendous amount of economic value arises from pleasure and meaning — the stuff of art, literature, psychology and anthropology. These qualities, built into goods and services, increasingly provide the work for all those computer programmers. And there are many categories of jobs, from public relations to interaction design to retailing, where insights and skills from these supposedly frivolous fields can be quite valuable. The critics seem to have never heard of marketing or video games, Starbucks or Nike, or that company in Cupertino, California, the rest of us are always going on about. Technical skills are valuable in part because of the “soft” professions that complement them.

The American economy is large and difficult to describe. It is a complex system where there are lots of educated and uneducated workers trying to fill a lot of different job slots. Simple answers on either side are not the solution in helping people to understand what is really going on. If there are lots of jobs in certain fields that need to be filled, like technical trades or nursing, it doesn’t necessarily mean that every student should suddenly go in that direction. I wonder if this is all tied to the Sportscenter-ization of discussion.

I wonder if someone has tracked whether these sorts of discussions happen in good economic times. In other words, when the economy is good and unemployment is low, do many people worry about what majors college students are pursuing or does it not really matter?

Starting salaries by college major

The National Association of Colleges and Employers has released a new study looking at 2009 starting salaries by college major. Average starting salaries for all graduates dropped a small amount from 2009:

NACE’s Fall 2010 Salary Survey shows that the overall average offer to Class of 2010 bachelor’s degree graduates stands at $48,288, compared with $48,633 offered to the Class of 2009. This represents a drop of 0.7 percent.

Liberal arts majors were below the average starting salary:

The average starting salary offer to liberal arts graduates—as a group—dipped 3 percent from last year to $35,508. Salary offers to sociology majors climbed 3.1 percent to $35,357 and history majors saw a slight increase of 0.7 percent to $38,731. Meanwhile, offers to English majors dropped 1.8 percent to $35,946 and offers to psychology majors fell 6.7 percent to $32,260.

The top five salaries? Four of five involve engineering – from number 1 to number 5, petroleum engineering, chemical engineering, mining and mineral engineering, computer science, and computer engineering.