New employment and earnings data indicates that holders of engineering degrees enjoy the best return on investment for the money they've spent on their tertiary training.
A new report released by the Federal Reserve Bank of New York breaks down the return on investment enjoyed by holders of bachelor’s degrees in the United States and reaches the conclusion that engineering majors reap the biggest economic rewards amongst all subject areas.
The study, conducted by economists Jaison R. Abel and Richard Deitz, calculated the return on investment of tertiary degrees by first looking at the wage disparity between degree holders and high school grads over the past four decades. A model was then used to calculate the lifetime earnings of each group, factoring in both the cost of tuition fees and the opportunity cost of pursuing a tertiary education in order to obtain final figures for returns on investment.
While holders of bachelor’s degrees see a 15 per cent return on their education investment on average, engineering majors come in well ahead of the back, with a return on investment of 21 per cent.
Engineers are also significantly ahead of the second place holders – math and computing majors and health majors, who enjoy returns of 18 per cent on their education expenditures. Business majors take fourth place, with returns on investment of 17 per cent.
At the opposite end of the scale were holders of degrees in the liberal arts, education and agriculture and natural resources, all of whom saw returns on investment well short of the average. Education majors enjoy returns on investment of under 10 per cent, while holders of liberal art degrees see returns of just 12 to 13 per cent.
While training in engineering or computer science provides the biggest returns, the economic promise of these degrees has failed to boost their popularity amongst undergraduates, and they comprised only eight per cent of all degrees issued in the United States the 2011-12 school year.
This is less than half the percentage for the most popular type of undergraduate degree – that of business studies, which accounted for around one-fifth of all degrees issued in the same school year.
According to the study’s authors, the reason for the relative want of popularity of engineering and other science-related subjects is the very same reason for the high levels of remuneration they provide – the difficulty of pursuing these areas of study compared to easier subjects such as commerce and accounting.
“Not all majors are feasible for every college student,” said the authors. “For example, recent research has shown that graduating with a math or science major is more difficult than pursuing other fields of study.”