Major Matters Most: The Economic Value of Bachelor’s Degrees from The University of Texas System
Author(s): Carnevale, Anthony P.; Fasules, Megan L.; Huie, Stephanie A. B.; and Troutman, David R.
Organizational Author(s): Georgetown University Center on Education and the Workforce; and The University of Texas System
Bill and Melinda Gates Foundation
Resource Availability: Publicly available
Analyzes the employment and economic outcomes of 2008 to 2011 graduates of the University of Texas system by choice of major, institution, race, and gender; and compares these findings to similar college graduates in Texas and the United States.
“This report on The University of Texas System (UT System) Bachelor’s degree recipients demonstrates that college, as one of the first big investment decisions a young person makes, has lifelong economic consequences” (p.1).
“In this report, [researchers] examine what influences the earnings of [University of Texas] UT System Bachelor’s degree recipients working in Texas…[by utilizing] data on graduates who enrolled as first-time students in college at their respective UT System campus and received their Bachelor’s degrees between 2008 and 2011. The study sample consists of 50,984 UT System graduates between the ages of 21 and 25 at the time of their graduation from the UT System academic institutions. Thus, all findings are conditional on having enrolled and successfully completed a Bachelor’s degree from the UT System.
Through a data sharing agreement with the Texas Workforce Commission (TWC), the UT System matched Bachelor’s degree recipients to state earnings and employment data, specifically TWC unemployment insurance (UI) wage data. The occupations of graduates are a key factor in determining earnings. However, occupation information is not included in the Texas UI wage data. So [the researchers] used the American Community Survey (ACS) one-year micro data files from 2011 to 2015 to examine occupational trends in the Texas workforce. ACS provides detailed information on college major that allows the comparison of all UT System Bachelor’s degree recipients to all college graduates with a terminal Bachelor’s degree between the ages of 24 and 28 in Texas and the United States” (p.4).
The report presents findings on UT system graduates’ earnings compared to the earnings of high school-education workers. In addition, the authors discuss differences in earnings by major, income level, race and ethnicity, and gender.(Abstractor: Author and Website Staff)
Major Findings & Recommendations
“Six key findings emerge from this research.
A UT System education is a worthwhile investment. UT System Bachelor’s degree recipients not only earn almost twice as much as similarly aged Texas high school-educated workers, but also outearn other Bachelor’s degree holders within Texas and across the United States” (p.2).
“Major matters most. The choice of major is the most important factor in determining UT System graduates’ wages even after controlling for other UT System graduate characteristics, such as test scores, institutional selectivity, demographic characteristics, and family income. The median earnings of the top-earning major (architecture and engineering) are almost $40,000 higher than those of the lowest-earning major (biology and life sciences).” (p.1-2).
“Choice of major outweighs institutional selectivity” (p. 3). “[G]raduates from open-access UT System colleges who complete degrees in high-paying majors earn more than UT System graduates at selective colleges who complete degrees in low-paying majors” (p.3).
“All UT System graduates earned a wage premium, including students who received Pell Grants. Overall, UT System graduates who received one or more Pell Grants have median earnings…less than UT System graduates who did not receive a Pell Grant…. After controlling for major, a difference in earnings between graduates who received a Pell Grant and those who did not still remains….Only when both major and institutional selectivity are controlled for do graduates who received a Pell Grant earn similar wages to graduates who did not receive a Pell Grant.
Access to particular occupations after college matters when examining earnings disparities by race or ethnicity. Overall, Black and Latino UT System graduates make around $6,000 less per year than White and Asian UT System graduates. This is consistent with national data. These wage gaps, however, vary within different major groups” (p.3).
“Women initially outearn men in majors dominated by women, but fall behind men over time. “Three years after graduation, male UT System graduates, in general, earn almost $6,000 more than female graduates. However, women tend to earn more than men in majors where women greatly outnumber men” (p.3). “After a while, this wage advantage disappears as men and women become more established in their occupations, and eventually men earn more than women in all majors.” (p.3).