Which degrees give the best financial returns? American universities
THE economies of the rich world increasingly depend upon skilled workers, and college degrees are in high demand. In 1972 a university-educated man aged 25-34 could expect to earn 22% more than a peer without a degree, according to the Urban Institute, a think-tank. Today that premium has risen to 70%. But if university pays, its benefits are not spread evenly across all graduates. A new report from PayScale, a research firm, calculates the returns to higher education in American universities. Its authors compare the career earnings of college graduates with the present-day cost of a degree at their alma maters, after taking account of financial aid.
Top universities may be growing ever more selective, but the returns on a college degree depend far more on field of study than the choosiness of the university itself, the report says. Engineering and computer-science students earn most, achieving an impressive 20-year annualised return of 12% (the S&P 500 managed just 7.8%). Engineers were also least dependent on institutional prestige: graduates from less-selective schools experienced only a slight decrease in average returns. Business and economics degrees also pay well, delivering a solid 8.7% average return. Courses in arts or the humanities may pay intellectual dividends but provide more mixed economic returns. Students concerned about their financial outlook should worry less about their school’s rank and spend more time brushing up on maths.