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Choosing Majors Doesn’t Have to Mean Choosing a Career

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It’s difficult to predict what the job market will be like when this fall’s college freshmen enter the job market. As is the cyclical nature of the economy, the current unprecedented economic expansion will likely wane. Innovations in artificial intelligence and automation are poised to create and eliminate a large portion of today’s jobs. Some experts predict that by 2030, some 400 million to 800 million people worldwide could be displaced in the modern economy. Even now, a candidate for the Democratic presidential nomination is running on a single issue platform based around the threat of automation to the current economic status quo.

Future college grads will likely need to be able to quickly adapt and acquire new skills to thrive in this new world. This unpredictable future makes it difficult to choose a course of study that will lead to a successful career. In anticipation of this looming change, we conducted a study to determine which majors provide the most career flexibility. We expect that majors that currently lead to a wide variety of jobs will be similarly flexible in the future. To better equip students to make this choice, we also considered the estimated earnings by major.

Over three-fourths of the majors studied were relatively flexible. Business, social science and humanities majors are more flexible than majors within education, computer science and math. And while STEM degrees tend to pay the most, having a STEM degree doesn’t lock workers into a STEM career.

Calculating a Major’s “Transferability”

In order to figure out which majors offer the most flexible career options, we conducted a two-part analysis. First, we looked at what job titles are most associated with respondents’ majors. Then we devised a system to rank these majors by the breadth of career options. To achieve this, we analyzed a sample of 438,342 individuals who took PayScale’s survey between July 2015 and July 2019. Respondents provided data on their current job title, current pay, their degree, and their area of study. Calculating the proportion of jobs to specific majors against the total sample gave a “Relative Commonness Score”. To understand how flexible a major was, we devised a “Transferability Score.” This measures the breadth of job titles a respondent could have with any given degree.

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The Transferability Score is represented relative to the average score of 1.82. Majors with transferability scores greater than 1.82 are considered to have a wide range of career options. Majors with scores less than 1.82 are considered to have relatively specific career paths available to them. Transferability scores clustered around 1.82 can be considered to be something of a coin toss; there is a relatively equal chance that a student will end up with a job that is the same as the most common job titles associated with that major.

Table 1: Most Transferable Majors, by Category

Rank Major Group Transferability Score
1 Business Majors 5.86
2 Social Sciences Majors 5.85
3 Humanities Majors 5.57
4 Physical & Life Sciences Majors 5.32
5 Communication Majors 5.31
6 Art Majors 5.26
7 Health Science Majors 5.24
8 Engineering Majors 5.06
9 Education Majors 4.89
10 CS Majors 4.56
11 Math Majors 4.15

 

The Majors That Keep Your Career Options Open … or Closed

Generally, we find that majors within the business, social science and humanities categories have more varied potential career outcomes than majors within education, computer science or math major categories. However, we find that most individual majors have a wide range of career paths open to them.


Choosing a major with a high transferability score such as in business administration, communication, business management, psychology or sociology suggests there is scope for a wide variety of career outcomes. For example, respondents in our dataset with a psychology major were found to have the most common job titles of ambulance driver, office machine operator or transportation attendant. A job that is actually relevant to psychology, industrial-organizational psychologist, pops up fourth. This wide spectrum of job titles is potentially an indicator of a lack of available jobs within a psychology specific career tracks for the supply of graduates with a psychology degree. Additionally, the breadth of jobs is perhaps indicative that students who complete a psychology degree have significant opportunities to pursue other career paths as well.

Conversely, choosing majors with extremely low transferability scores leads to careers that are extremely specific to the chosen field of study. Within our data, we found the least transferable major to choose was audiology, with all respondents with a degree in audiology turning out to be audiologists. This is a trend with all majors with very low transferability scores. For example, students who major in nuclear physics tend to become physicists, students who choose a nursing degree are much more likely to be nurses and so forth.  When you look at the pay trends for these more niche majors, they generally have jobs that pay fairly well and are in consistently in demand.

STEM Majors Pay, but at a Cost

Many students see the choice to attend college as primarily a financial decision. In less selective schools, students tend to choose specific majors because they have high expected salaries. These students see their degree as an investment that is expected have a relatively quick return. When we look at the highest expected salaries by major with our dataset, we see that STEM fields generally dominate the top paid majors in terms of expected early-career pay. These findings correlate with other studies as well. In Georgetown University’s “The Economic Value of College Majors” report, the authors found that of their top 25 highest-paying majors, all but two (economics and business economics) were in STEM degrees. However, just because respondents had a STEM degree did guarantee that they had a STEM career track. Many of the top paying majors in our data were found to have fairly large transferability scores and therefore a wide range of potential career avenues that weren’t necessarily exclusive to STEM careers.

Table 2: Highest Paying Majors

Rank Major Early Career Median Pay Mid-Career Median Pay Transferability Score
1 Petroleum Engineering $94,500 $176,900 1.08
2 Electrical Engineering & Computer Science (EECS) $88,000 $142,200 1.96
3 Applied Economics and Management $58,900 $140,000 2.52
4 Operations Research $77,900 $137,100 2.19
5 Political Economy $57,600 $136,200 3.44
6 Actuarial Mathematics $63,300 $135,100 1.80
7 Electrical Power Engineering $72,400 $134,700 1.62
8 Business Analysis $57,200 $133,200 2.79
9 Pharmacy $79,600 $132,500 1.41
10 Aeronautics & Astronautics $73,100 $131,600 0.25

 

Petroleum engineering majors have the highest early-career median pay of $94,500, with the most common job title being petroleum engineers (go figure). Other common job titles include drivers/sale workers, cost estimators and editors. All of these jobs have commonness scores greater than 1, indicating that there is real variation in potential career choices within this major. As we see from the titles themselves, many of them are not STEM jobs.

Within our sample, only about 23.4% of majors have transferability scores at 1 or below- which suggests extremely restrictive potential career paths. Of the top ten best paying majors, only aeronautics and astronautics has a transferability score significantly below 1. Astronomer is over 6,995 times as common as any other job title for that degree. The remaining nine of the top ten best paying majors have a median score of 1.96.

Political economy, while not a non-STEM degree, has the highest transferability score across the top ten best paying majors. The breadth of career options include social scientist, public relations specialist and financial specialists. These three titles have roughly the same relative job commonness score, suggesting that a graduate with this specific major is just as likely to be in any one of these three disparate careers.

While STEM degrees do have a relatively wide breadth of jobs, it’s important to keep in mind that the estimated salaries are heavily influenced by the relative commonness of various job titles. For example, the job title of petroleum engineer is significantly more prevalent than the other common job titles for petroleum engineering majors. As such, the estimated salary for petroleum engineering majors is more a reflection of the salary for petroleum engineers than it is for the breadth of jobs held by petroleum engineering majors. In other words, since petroleum engineer is a high paying job and most petroleum engineering majors become petroleum engineers, the major has high estimated pay. It is important to understand that while a major may be transferable to many jobs, those jobs may not yield similar pay.

Education Doesn’t Pay and is Hard to Leave

Degrees within the education major group represent some of the least transferable majors along with some of the lowest early career wages. Education majors have an average expected early-career salary of just $37,600, which isn’t enough to pay rent in many American cities. While teachers may benefit from having the most meaningful jobs, their salaries come up short.  In the past two years, the lack of a living wage led to significant unrest within teachers’ unions across the country. An annual poll by PDK found that 55% of educators would like to go on strike for higher pay, with half of teachers considering quitting their jobs.

Unfortunately, most other job titles associated with education degrees outside of teaching are also low paying in nature. For example, the most transferable education degree is a Bachelor of Education, for which elementary school teacher is only the sixth most common job. The most common job title associated with an education degree is photographic processing machine operator, followed by painting, coating and decorating workers. As such it is difficult to see how students enrolled in education majors can make comfortable living without significant structural changes to how we pay educators.

Figuring Out the Next Steps

Of course, money isn’t everything when choosing a degree. According to a survey conducted by UCLA, 9 out of 10 college students believe that it is important to find a major that is intellectually stimulating, “no matter how practical” it is. Similarly, the Department of Education finds that an estimated 30 percent of students switch majors at least once, so an incoming freshman’s first choice of major isn’t necessarily going to be the major they stick with.

I chose to major in economics due to a wonderful high school teacher and a passion for the subject. Unfortunately, it’s very likely that with the burden of student loan debt and looming economic changes, future college graduates will not have the same luxury I did. Informed students should consider transferability in their college plans, in addition to their interests and the current job landscape. For further reading, PayScale has in depth research on the economic benefits of colleges and college degrees including College ROI and the College Salary Report. Additionally, specific career salaries within the various majors outlined in this piece can be queried using PayScale’s free survey to see what salaries those jobs are likely to command today.

Methodology

We looked at a sample of 438,342 respondents from July 2015 to July 2019 who provided data on their current job title and their bachelor’s degree major to study the relative common jobs within each major the most transferable jobs.  This required the separate but intertwined analyses- the relative commonness of jobs within PayScale’s dataset and then the calculation of the transferability score of those relatively common jobs by each major.

The first step was to determine the most common jobs for different majors, accounting for the unique bias in PayScale’s data collection. Specifically, PayScale’s data is disproportionately weighted towards respondents who work in the tech industry. As a result, someone with say a degree in philosophy is more likely to be a software developer in our sample than across the entire population of philosophy majors in the United States. To correct for this bias, we use the relative commonness of a job title instead of the absolute commonness. This is calculated by first studying the baseline of all job titles and then calculating the ratio of respondents within each major for each represented job title. For example, the relative commonness for accountants and auditors among respondents with an accounting degree is 14.0.  This indicates that someone with an accounting degree is fourteen times more likely to be an accountant or auditor than the population overall.

The ratios calculated in the relative commonness score also inform the calculation for the transferability scores generated for majors. The transferability score is defined as the measure of entropy calculated by studying the probability distributions of jobs to majors adjusted by the proportion of respondents within any job title/major combinations against all respondents with that major.  Since we had calculated the relative commonness of each job title within our sample, we used those ratios to adjust the probability distributions of job titles associated with majors before calculating the entropy scores for each major.

To estimate salaries by major we studied 3.5 million respondents from September 2009 to July 2019 and calculated the effective annual compensation for early and mid-career respondents (defined as three and 20 years of experience respectively. Variables included pay, major and years of experience. We measured pay as total cash compensation (TCC) and we made inflation adjustments to salary figures using monthly consumer price index (CPI) data to make comparisons in June 2019 dollars.

Our median sample size was 519 respondents. To ensure adequate data coverage, for a given degree level/major group combination (e.g. Arts majors with bachelor’s degrees), we excluded any school with fewer than three respondents with each of 0-5, 10-20, and 20+ years experience, and any school with fewer than 28 respondents total. Our survey was restricted to not-for-profit schools.

For each degree level/major group combination, we modeled TCC as a function of years of experience. The model fits a unique maturity curve (relating years of experience and pay) for each school and school/major combination. We identified “early career” as three years of experience and “mid-career” as 20 years of experience. Additionally, calculated “Early Career Median Pay” and “Mid-Career Median Pay” as modeled pay among people with three and 20 years of experience, respectively. From our salary analysis, the average percent variation of early career pay was +-6.1 percent. The average percent variation of mid-career +-6.9 percent.

Definitions

Total Cash Compensation (TCC): TCC combines base annual salary (or hourly wage), commissions, tips, bonuses, and profit sharing. It does not include equity (stock) compensation, cash value of retirement benefits, or value of other non-cash benefits (e.g., healthcare).  Salary estimates for Early and Mid-Career salaries conform to the methodology described previously.

Median Pay: The median pay is the national median (50th Percentile) total cash compensation (TCC). Half the people in the sample earn more than the median, while half earn less.

Relative Commonness: This is the relative commonness for a particular major compared to all U.S. workers in our data set. For example, the relative commonness score for Accountants and Auditors among respondents with an Accounting degree is 14.0.  Therefore, it is fourteen times as likely that someone who majored with an Accounting degree will have a career as an Accountant and Auditor as compared to the population as a whole.

Transferability Score: This is a measure of information entropy known as Shannon’s Entropy. It is defined by the following equation:

This accounts for the probability any particular jobs title based on the number of respondents with a given major and reported job titles. Higher scores above the median are considered to be high entropy and therefore have a wide variety of potential job titles while low scores below the median are considered to have low entropy and have relatively limited available job titles.

Sudarshan Sampath
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sabahat
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Major Report
The most significant report for any business is the benefit and misfortune proclamation, likewise called a P&L or salary explanation. This report reveals to you how a lot of cash a business makes, just as much more. A well-run accounting task incorporates subtleties for where you spend and where your cash originates from. https://www.eaccountinghelp.com/2019/05/major-reports-which-should-be-prepared.html

Associate Degree Programs Bergen County NJ
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It’s important to make an educated decision when trying to choose a major. This is some great information. Thanks for sharing.

tita
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thanks

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