Unemployed College Majors: Engineering vs. English

In trying to understand what drives the Occupy Wall Street protesters, certain commentators have resorted to stereotyping: casting them as unemployed youth with liberal arts degrees, disappointed that their degree in puppetry or medieval French didn’t pay off. According to this rhetoric, there’s plenty of demand for engineers and scientists, students are just too stupid or lazy to specialize in these fields. Setting aside the condescending tone, how true is this claim?

Analyzing data on unemployment by major, as featured in the Wall Street Journal, we find that it’s a half-truth, up for interpretation. In terms of unemployment rates alone, technical fields seem to have no advantage over more generalist education. Rather, while some science or engineering majors are in high demand and others face up to 15-20% unemployment, the liberal arts majors seem to occupy a happy medium around 6-7% unemployment. But if we dig a little deeper and look at expected returns in terms of wage, then the advantages of a mathematically oriented major become evident. Readers of this blog might appreciate that majoring in Military Technologies provides one of the highest returns despite a 10.9% unemployment rate. Sometimes it makes sense to take a risk and hold out for your dream job, especially when you’re specialized.

For those of you curious to see the numbers, I included the full table of data here, highlighting specific majors I refer to in the text.

Unemployment Rate

Based on data from the Georgetown University (Hoya Saxa!) Center on Education and the Workforce the employment rate for college grads varies from 0.0% for School Student Counseling to 19.5% for Clinical Psychology. This should already ring some alarm bells, as within the same field the least technically trained are far more likely to find a job than the most technically trained. And the list goes on. The much maligned English majors have an unemployment rate of about 6.7%, which puts them above environmental engineering (2.2%) but below industrial engineering (9.25%). Engineers clearly face a far greater variance in their chances of employment than do those majoring in the humanities.

Why? Because fields in science, math and engineering require so much more specialization. This data set has 26 categories for engineering and 33 for science. Hence students will emerge with a deeper but much narrower skill-set. The demand for their skills will depend on the vagaries of the economy, with some fields in much higher demand relative to others. For example, the discrepancy between environmental and industrial engineering makes sense when we consider that the US is downsizing its manufacturing sector while promoting environmental sustainability. For an English major on the other hand, the ability to analyze text and write well applies to many white-collar jobs, providing a far greater pool of potential employers.

At the same time, this simple statistic can mislead. It doesn’t differentiate between job types, so counts the professor and burger flipper as equally employed. Perhaps graduates with a more specific skill-set will hold out longer for their dream job, while generalists take what they can get. Though they face more uncertainty, the returns to specialization in terms of wages might make it worthwhile.

Expected Returns to Education

To address this concern, I took the existing data and computed an expected return to education by major[1]. It multiplies the likelihood of employment by the mean wage if employed, assuming that those unemployed receive zero wage. When ranked according to those expected returns, it clearly pays to specialize in the hard sciences, engineering and mathematics. Often the high pay more than compensates for the high unemployment rate, as with Military Technologies, mentioned earlier, with $84,422.25 in expected annual returns. In such fields, it clearly pays to not get the job at the local McDonalds and hold out for the right opportunity.

Does this make sense? According to economic theory, unemployment rates and wages are negatively correlated along a ‘wage curve’.  A large supply of available workers bids down the price of labor. From the chart, we see that though this holds true in general, there are many notable exceptions. These outliers might suggest that certain sectors face a high level of frictional rather than cyclical unemployment; jobs are out there, but it’s difficult to match candidates to positions because of location and lack of information.

Though the trend is negative, there are many notable outliers.

Conclusion:

For policy makers, this might suggest that too many students do liberal arts at the expense of math and science. This makes perfect sense if risk-averse students prefer the relative certainty of getting a decently paid job to the risk of getting either a high paid job or nothing. More science grants and scholarships would certainly help students who hesitate to choose the riskier, more rewarding option.

Students choosing a major face a choice between what Nassim Taleb termed ‘mediocristan’, low risk & low returns, and ‘extremistan’, high risk & high returns on average. The decision of course depends on personal preference, as life is about more than having a job and a lot of money. But as economic foundations tremble and students who once though they had a guaranteed job find themselves in the street, perhaps it’s worth taking the risk to do something quantitative.

 


-       [1] (1-unemp%)(.25* 25th%earnings + .5 * Median earnings + .25 * 75th%earnings) + unemp% * 0

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6 thoughts on “Unemployed College Majors: Engineering vs. English

  1. One of the things that is missing is the symbiotic relationship between fields of study. You are right that there has been heavy emphasis on engineering and disparagement of the liberal arts, but what is missing is the understanding of how they depend upon each other.

    Engineers, as we know, design many useful pieces of technology, but the people who actually make use of that technology are not necessarily engineers. For example I’m a television producer. We have cameras, microphones, audio mixers, switchers, and other equipment created by engineers. But engineers don’t create the content we produce. No one tunes in because of our technology, they tune in because of our content, and that content is created by producers like me who have a liberal arts background. For example I just finished producing a series of interviews with veterans of the Second World War, Korea, and Vietnam. Without the technology that engineers create my project wouldn’t have been possible, but there were no engineers with me while I was interviewing, editing, and managing the project.

    The problem isn’t that the liberal arts are bad and STEM is good. The problem is that the liberal arts have been made irrelevant by the way they have been taught over the past few decades. We need to rethink how they are relevant to our society and craft an educational program that will cultivate people’s talents in a way that is useful to society and thus lucrative to those who pursue that path.

    • I definitely agree that liberal arts could be much more useful than they are now, but nobody ever said that STEM was good and liberal arts are bad, just that we’ve lost the balance between the two. Despite market forces pushing people into STEM, most graduates go into liberal arts. I think it’s hard to make the case that we need many more liberal arts majors than “makers” in the broader sense of the word, especially the way liberal arts are taught now. We would also do well to de-stigmatize trade schools.

  2. To put it simply, I enjoy English. I enjoy writing short stories and poetry. I don’t enjoy engineering. I’m not a doctor. I’m not a programmer. I have been a “maker” as you say, for ten years of my life. I’ve worked as a plumber, I’ve worked as a factory worker. Why would I let a 10% unemployment rate deter me from pursuing a degree in something I actually enjoy? I’ve never been without a job over the course of my ten years in the workforce, despite the high unemployment rate, so it seems to me my odds haven’t changed. I still have about a 90% shot of finding employment. That’s a little better than Vegas odds, isn’t it?

    The truth of the matter is, this conversation comes up from time to time because there are people who do the math and just can’t figure out why any of us are liberal arts majors. All those people who tell you “don’t quit your day job” are convinced that the only answer in life is pursuing a field that is highly technical so that you can become wealthy as quickly as possible. Wealth is a relative term. Anything in the $40,000 range is wealthy to me at this point. More free time is worth more to me than an additional $20,000.

    The Liberal Arts are still extremely relevant, although being a success with your liberal arts degree requires a lot more initiative than many people posses, particularly if you hope to work within your field. Don’t try to quantify something that doesn’t come down to money. We’re not all trying to become millionaires, or expecting the recruiters to come calling after graduation. Hell, there’s always marketing if everything else falls apart.

  3. On an annual basis, the available job pool in the corporate world is shrinking by 3-5% every year. At the same time we are continuing in the US to train people to work in this system creating a declining job pool, with more people being trained to fill jobs that are disappearing creating huge unemployment. So why are we continuing to train people for jobs that won’t exist? Today the unemployment rate is running around 7.8%, but if we calculate that number in a real sense the number is closer to 15%. How you ask? We don’t count someone as unemployed if they haven’t looked for a job during the last 30 days. Tell that to those who can’t find a job in their field who are unemployed by the true definition.:

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