Business and Computer Science Majors are the Biggest Bargains in Higher Ed

Graphic credit: “Costs of and Net Return to College Major”

It is widely known that certain college majors offer better career prospects than others. Engineering and business majors earn more money on average than, say, art and English majors. Less well known is the fact that certain majors are more expensive to teach. As seen in the chart above, engineering graduates cost twice as much to educate as library graduates.

The data comes from a new study, “The Costs and Net Returns to College Major,” by Joseph G. Altonji and Seth D. Zimmerman, published by the National Bureau of Economic Research. They drew their cost data from the Florida State University System.

The insight that different majors have different costs has important implications for how state systems of higher education allocate their resources. In Virginia, there has been a big push since the “Top Jobs” legislation of 2011 to increase the number of STEM (science, technology, engineering and math) graduates at Virginia colleges and universities. The shift to higher-cost STEM majors, while arguably justified from an economic perspective, contributes to the rising cost of higher education.

Another way to slice and dice the data is to look on the return on investment for different majors based upon the cost of providing the education and the present value of graduates’ earnings. As seen in the chart below, business majors, who cost relatively little to educate but enjoy high lifetime earnings, represent an extraordinary bargain. By contrast, architects, who are expensive to educate but earn relatively little, are a Return on Investment disaster. Much to my surprise, even engineers don’t look like such a bargain.

Career earnings may not be the best way to measure the social value of a particular major. It is possible that architects contribute far more to social well being than their pay stubs would indicate. (It’s hard to imagine that genders-studies majors have anything worthwhile to contribute to the world, but, hey, that’s me.) But the present value of earnings is a pretty good proxy for a graduate’s economic value.

As lawmakers ponder how to allocate scarce higher-ed dollars, they would be well advised to take into account how much bang for the buck colleges are getting for their investment in different disciplines. Perhaps Virginia colleges need to promote enrollment in business schools and less in architecture. I never imagined myself saying this, but maybe we should be encouraging more kids to enroll in psychology and fewer in engineering!

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14 responses to “Business and Computer Science Majors are the Biggest Bargains in Higher Ed

  1. Interesting data but I’m not sure that it means anything or should drive any decisions, since a world without engineers, physicists, farmers or biologists sounds rather unattractive. Fine with me that some English or business majors are subsidizing those vital fields…

    Also worth asking about what the numbers say after 20 years out from graduation, rather than ten. Given tuition is the same for all those fields, I guess someone will notice some majors are being overcharged….

  2. These numbers and conclusions are worst than useless. They are grossly misleading on their face, and should not be used to make any serious decisions.

    • Reed, I agree that the conclusions are debatable. But why would you think the numbers are worthless?

      • I could not access the full study, only the chart and single page abstract.

        That said how do you do a cost benefit analysis of a system that is totally broken? Where all but a few learn nothing or close to nothing in undergraduate school. See academically adrift. A system where most research is driven not by a quest for truth but an affirmation of tenured professors ideology and/or self interest and/or angst. Where peer review punishes any views different from rigidity held ideology. A system where costs per student and per activity are hidden from public view and misstated to force benefits and other peoples money into some parts of the curriculum while punishing and blowing up altogether other peoples education, including many disciplines of former study that now no longer educate but instead entertain or promote grievance or political advantage.

        A system that produces little or no education at all so there is a great shortage of qualified people in most fields of employment. A system of learning with no standards of performance, or coherence at all, save that of keeping students tied into their seats long enough to suck up their money while diverting most of that money away from that students education and shoving it instead towards feeding the voracious needs of tenured faculty and university administrators who refuse to teach students, only use them.

        And of course there is all the evidence happening every day and plain to see right in front of our noses.

        For example, The WSJ recently reported that well educated humanities students were most valued by first class high paying employers if any such well educated humanities students could be found. But finding them was increasingly rare. Thence they were precious commodities wherever found as the shortage of honest to goodness educated college and university graduates of any sort was reaching critical proportions, now indeed a national emergency.

        All this said, I agree with Rippert’s comments generally. At lease you can test an alleged engineer or computer scientist and their ilk. Only God knows about everyone else since they all get at least Straight As.

        Beyond that – why sure the Business Grads make more money cause they end up somehow in Business, while most of the rest hate business. Regarding business, its best and brightest and what we get from that crew, see The Business School Boondoggle in April 21 WSJ.

        And read the book The Golden Passport, Harvard Business School, the Limits of Capitalism, and the Moral Failure of the MBA Elite by Duff McDonald. That gives us a good analysis on our nation’s cost benefit ratio generated by the best education money can buy in America.

  3. Some of the most valuable are those with a content degree AND a computer technology degree.!

    dual-discipline degrees in general – hard science and allied is a plus for one.

    and the most important core skill in language and technology literacy.

    example – a history major that knows how to manage the content on electronic media … internet, allied.

    nothing worse than someone with a computer degree who does not understand the field he/she is trying to computerize.

    “big data” by itself is worthless.. it’s WHAT the DATA is that is valuable and knowing how to slice and dice it for the people who use it .. golden.

  4. Or be both a CS and business major/minor for the best of both worlds.

    • Yes indeed.

      Although, the best network engineer I ever knew used to get a laugh when asked what he studies in college. “Double E” he’d say. “Oh, Electrical engineering?” “No. Economics and English.” Guy taught himself technology on the job.

  5. You don’t really need a 4 yr degree for general computer technology. You can get that in a two-year school. If you want to specialize – like computer security or communications, database, network configuration and management, etc, you need “more”.

    Computers have become like engineering or medicine where after the first two years – you specialize..
    Hardware. Computer hardware deals with building circuits and chips. …
    Networking. …
    Graphics. …
    Programming Languages. …
    Software Engineering. …
    Systems. …
    Artificial Intelligence.

    you end up with fields like infomatics… like UVA is doing or autonomous vehicles like Va Tech is doing or Information Technology – GMU or VCU – health administration, etc.

    this is a big problem for many young headed to college. They think they’re going to get a 4-year BA or similar (like many used to do) .. and that level of knowledge will get you a job at Starbucks.. you need MORE if you actually want a REAL job with a REAL future..

    We have the educational resources – the problem is that our society/culture is not appreciating the level of education that is needed for 21st century jobs.

    rural whites are getting high school degrees looking for manufacturing or mining jobs .. inner-city folks are pinning their hopes on getting lucky as a sports or entertainer.. etc.. failing that – both just want a “job” .. someone to give them a job – as opposed to them taking personal responsibility for getting themselves educated and going out and getting one.

    We blame their parents but their parents education is even worse.. and the 21st century just accelerated and left them all behind … one set thought Obama was going to rescue them , the other – Trump.

    Give the Europeans and Asians credit – they know the truth and know it’s up to them as individuals to make their way in the world.

    We? we have some that are taking the challenge but we have way too many crybabies, excuse-makers.. and folks who think a govt loan is all they need
    to get educated and get a job.

    GRUMP!

  6. Jim:
    You’ve missed a big point. Calculate not just the earnings from the various majors but the lifetime taxes paid as well. The US and Virginia should be paying kids to get CS degrees while double charging English majors to subsidize the engineers.

  7. Re lifetime taxes paid, not an accurate measurement of anything if you are one of the Trumps of this world. Re Reed’s point, “A system where costs per student and per activity are hidden from public view and misstated to force benefits and other peoples money into some parts of the curriculum while punishing and blowing up altogether other peoples education,” exactly so, especially the lack of transparency — but then that is Jim’s point here: some curricula cost more than others and provide more benefit than others. I just hate to see Psychobabble given THAT stamp of approval.

    • Yes, agreed. We need to toss out the “Psychobabble” that today fake professors use to eat the Humanities alive each day as surely as the Taliban blow up artifacts of ancient civilizations such as the Syrian City of Palmyra.

      But at the very same time we must restore the Humanities to their rightful and critical roll in American education as these Humanities are timeless, the very foundation and living lifeblood of our Western Civilization, or all our labors will be lost, including the very tools that are essential to our ability open up new worlds worth living in as surly as Homer’s Iliad and Odyssey have opened new worlds of growth and innovation over the past 3500 years.

      We simple cannot break this chain of the Humanities on which all our humanity depends. Break this chain and then we are lost altogether. Right now, at this very moment in time, we see what happens when this lifeblood of our past is cut off. For it must continually flow into our present and our future, what keeps us alive and educated to thrive and prosper.

      See my comments at:
      http://baconsrebellion.com/uvas-invisible-research-subsidies

  8. re: ” some curricula cost more than others and provide more benefit than others.”

    I guess when I see the tremendous innovation, technology – productivity gains in our world that touch almost every part of our lives – I KNOW these things have come from people with significant education…

    so that’s the glass half full.. and there is no question there is a glass half empty side.. we are clearly human and guaranteed fallible.

    but take a look at some of the innovations in the last 30 years :

    1. Internet, broadband, www (browser and html)

    2. PC/laptop computers

    3. Mobile phones

    4. E-mail

    5. DNA testing and sequencing/human genome mapping

    6. Magnetic Resonance Imaging (MRI)

    7. Microprocessors

    8. Fiber optics

    9. Office software (spreadsheets, word processors)

    10. Non-invasive laser/robotic surgery (laparoscopy)

    11. Open-source software and services (e.g., Linux, Wikipedia)

    12. Light-emitting diodes

    13. Liquid crystal display (LCD)

    14. GPS systems

    15. Online shopping/e-commerce/auctions (e.g., eBay)

    16. Media file compression (jpeg, mpeg, mp3)

    17. Microfinance

    18. Photovoltaic solar energy

    19. Large- scale wind turbines

    20. Social networking via the Internet

    21. Graphic user interface (GUI)

    22. Digital photography/videography

    23. RFID and applications (e.g., EZ Pass)

    24. Genetically modified plants

    25. Bio fuels

    26. Bar codes and scanners

    27. ATMs

    28. Stents

    29. SRAM flash memory

    30. Anti-retroviral treatment for AIDS

    all of these were invented by “educated” folks..

    and you know… some of these things have been so profound in their impacts that they are automating and robotizing people’s jobs right out of existence!

    Finally – some of the greatest inventors of our time like Newton had no formal education – and no one to blame the lack of it on – they succeeded in getting educated with the resources they had available at that time.

    And today – the availability of information to gain an education is so easy to access and so ubiquitous – one might wonder what the role of a teacher or instructor really is any more once a kid learns how to read… in k-5.

    I just have a hard time with universal condemnation of anything… other than right wingers… kidding of course… but the world is not perfect and never will be and is full of bad and horrible and evil as well as positive things.

    education has become a racket – yes.. but that does not and should not keep any of us from seeking our own path to what we want to be – especially so in this country where we have virtually unfettered freedom of opportunity to do so.

    don’t be blaming others.. it’s more often than not an excuse for our own failings, our own frustrations and our own inflexibility.

  9. Just a reminder of one key take-away from the data: “The shift to higher-cost STEM majors, while arguably justified from an economic perspective, contributes to the rising cost of higher education.”

    An ongoing concern of this blog is to figure out why tuition and other costs of attendance are out of control. The emphasis on STEM majors is likely one contributor. For what it’s worth, here in Virginia, that emphasis cannot be blamed solely upon college administrations — it has been reinforced by public policy.

    • Here I believe that the base problem is how the system today is set up to fail. The current system of higher education demands that university Research be a war with, and ultimately destroy, the teaching the students, and other subjects they must master.

      Indeed today’s system is set up to almost insure that the ever increasing demands of research destroy the integrity and viability of all the other components of a students education, those critical teaching and learning experiences and tools that students need if they are to have a good chance at a real education: to find out who they are, who they want to strive to be, what they valued at their core, and how to go about the vital task of building an examined life worth living. One that can give their life and their work that meaning that can only grow out of their own core convictions that they have settled upon for themselves after their own hard work, instead of the those dictated to them by the neurotic ideologies of their professors.

      Today’s system of higher education also insures that university Research will fail totally, collapse in upon itself, driven to absolute corruption without the check of the Humanities and a healthy society outside and apart from research.

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