Commentary: High salaries and the chance to work with new technologies have attracted young people to jobs in the tech sector. Seeking to serve these students has led to a shift in the emphasis in higher education toward STEM majors and away from liberal arts. Parents worried about their children paying student loans are happier as well.
Nationally, the trend is declining enrolment in liberal arts colleges. Fewer than one-in-five degrees are now awarded in the humanities.
Here in New Mexico, the formula used by Santa Fe to allocate funds among state universities gives a premium for engineering and science degrees awarded. The idea is to incentivize New Mexico universities to funnel students into STEM.
Of course, the reason for the push for STEM is high salaries. And certainly, new STEM grads typically earn more than other grads.
But the real question is, does a STEM degree guarantee higher income over a career? We have little evidence on this issue. On the one hand, it is clear that new STEM grads, with current information about new technologies, do earn more. But do the same people earn more 20 years after graduation when their skills are not so fresh?
The evidence we have is very limited. One study, looking at the long-term earnings of French high-skilled workers who stared their career during the 1990s tech boom found that tech workers ended up earning 7% less than other workers.
Of course, the choice of a career is a difficult as one has to predict what the demand will be not just at graduation but over years and decades. STEM jobs, which pay well today, may not pay well in the future.
Economic theory says that the return to a particular major on average should be the same after adjusting for the abilities of the student. STEM majors are generally more difficult. For students to be successful, they need ability and preparation. So of course, these students on average go on to good jobs.
The same students likely to succeed in STEM are the same students who do well in humanities majors. One can be an engineer and have a high starting salary or one can be a history major, then go to law school. The engineer makes a good income right off the bat, while the history major’s career is delayed by long years of law school, followed by the high salary of an attorney.
Of course, we are talking about averages here. Motivation and hard work can do a lot to overcome preparation and ability. Many students that you would predict would not succeed in STEM, do quit well. Same applies to students who go to be lawyers.
In any case, the reason that a college degree is so valuable is not for the salary earned on graduation—although a good starting salary is nice—but rather the ability to think critically, as critical thinking is a valuable skill in any career.
Christopher A. Erickson, Ph.D., is a professor of economics at NMSU. He attended a liberal arts school as an undergraduate and majored in history. The views expressed may not be shared by the regents and administration of NMSU. Chris can be reached at email@example.com.