College and earnings

I’ve come to think that President Obama’s idea on judging a college by the average earnings of its majors is not just ill-considered, but a downright horrible idea.  Since I was pretty happy with the other metrics, I don’t think I stopped to consider just how dumb an idea that is.

Anyway, the NYT takes a look at recent data to see how colleges fare based on the average earnings of their majors.  It’s quite interesting and well worth reading, but it basically all boils down to this– the higher the proportion of your students that are engineers and men, the higher your graduates average earnings will be.  This really says nothing at all about the value of the education, but simply which majors are most popular at a university (and the proportionate size of its engineering college if it has one).  Now that does not explain all the variance, but gets you most of the way there.   A high quality liberal arts college like Oberlin fares horribly.  Surely in significant part because there’s no engineering and lots of students into art/performing arts.  But if you go to Oberlin and major in Economics or Math, you’ll likely do just fine.

A nice Planet Money story pointed out last week that far more important (in terms of earnings) than your choice of college is your choice of major.  The simple truth is that your typical petroleum engineering graduate from Texas Tech is going to be making far more than your typical philosophy or psychology major from an Ivy League school.

The gender angle is big, too.  If you are at all like me, you know lots of women with excellent degrees who are personally making little or no money because they chose to stay home with their kids (Alex’s godmother, for example, has a mechanical engineering degree, but currently earns $0).  Or consider Planet Money’s Lisa Chow who has an Applied Math degree, but is an NPR reporter for way less money (surely a more common state of affairs among women).

Of course, what all this overlooks is that there’s far more to college that just how much you are going to earn when you’re done.  And, in fact, there’s far more to life than how much you earn.

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