August 1, 2014 by Gwen Burrow
Everyone knows by now that a college degree is very nearly the sine qua non to landing a solid career. But data has also recently shown that having a degree matters even more during a recession, and getting the right degree matters even more than that.
In her recent article, The New York Times‘ Claire Cain Miller noted that while graduating into a recession is generally unlucky for everyone, recessions don’t treat everyone the same. The data, reported in a new study by Yale economists (see chart above), shows that recessions tend to widen the gap between wage levels. In other words, high-paying jobs generally pay more while low-paying jobs generally pay less:
Those who major in subjects that command higher salaries, like engineering and finance, increase their earnings advantage when they graduate into a recession. And those who major in subjects that lead to lower-paying jobs, like philosophy and music, are even more disadvantaged than in normal economic times.
Using EMSI’s IPEDS data from Analyst, we investigated the number of completions in each of the 20 college degrees studied by Yale. We focused on the years 2007 (on the eve of the recession), 2009 (when the recession officially ended), and 2013.
|Basic||2007 Completions||2009 Completions||2013 Completions||% Change 2007-2009||% Change 2009-2013||% Change 2007-2013|
|music & drama||38,341||39,198||43,284||2%||10%||13%|
|philosophy & religion||21,029||21,352||22,127||2%||4%||5%|
|Source: IPEDS historic completions|
While Yale economists Lisa Kahn, Joseph Altonji, and Jamin Speer observed that the pay-gap trend wasn’t as marked in the Great Recession (when the benefits for high-earning majors were suppressed because the recession affected the economy so broadly), they nevertheless conclude that earning a degree in such a downturn is still a strategic move. “Even though I’m contributing to this line of research that shows college graduates into a recession can be damaged in the labor market,” Ms. Kahn said, “a college degree is more worthwhile than ever. That’s not an opinion, that’s a fact.”
Students and jobseekers should continue to keep this in mind. Even though the recession has technically ended, its effects are still felt in many areas, which means those looking to get hired should seek education and training that lines them up with jobs more likely to weather brutal economic storms.
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