How much of a difference does going to an Ivy League school versus an open enrollment college make on your future earnings? Well, that depends on your major, according to a recent study published in Contemporary Economic Policy.
After analyzing a survey of thousands of college graduates and their salaries a decade after graduating, researchers found that for some fields, graduating from a selective college didn’t make much of a difference on future earnings.
Specifically, for business and other liberal-arts majors, the prestige of the school has a major impact on future earnings expectations. But for fields like science, technology, engineering and math, it largely doesn’t matter whether students go to a prestigious, expensive school or a low-priced one—expected earnings turn out the same. So, families may be wasting money by chasing an expensive diploma in those fields.
This makes sense, since STEM fields tend to hire with a focus on skills acquired:
For potential employers, the skills students learn in these fields appear to trump prestige—possibly because curriculums are relatively standardized and there’s a commonly accepted body of knowledge students must absorb. So, a student may not need to attend the best possible school to ensure a good salary after graduation. (It’s important to note that we controlled for numerous other factors that might influence postgraduation earnings, such as family income, race/ethnicity, gender, marital status, SAT score, postgraduate degree and age at graduation and more.)
Business majors, on the other hand, would benefit from the connections made during college with potential employers and other alumni at more prestigious schools. For business, education, and humanities majors, the researchers found a 6% to 18% better salary for graduates of prestigious schools compared to less selective colleges or midtier colleges (based on Barron’s ratings of colleges).
Good stuff to know before you invest in an expensive diploma. And for more help choosing schools, try this tool that shows you the colleges with the highest salary for your field.
Is It Where You Go or What You Study? The Relative Influence of College Selectivity and College Major on Earnings | Contemporary Economic Policy via The Wall Street Journal
Photo by David Paul Ohmer.