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.
- Several of the degrees that trend towards lower wages during a recession grew quite a bit from 2007 to 2009: public health (19%), environmental studies (39%), art history (10%), and secondary education (11%). This is not to say these students were choosing their college path unwisely. When the recession hit in late 2007, students who graduated the previous May had had no inkling their degrees came on the verge of the downturn, and those who graduated in the following years were already two or three years into their degree programs when the recession hit.
- Economic degrees, which have the greatest positive earnings difference during a recession, grew by 10% from 2007 to 2009, peaking in 2011. They have since declined slightly.
- Computer programming degrees have the third-highest positive earnings difference during a recession, yet they actually declined 6% from 2007 to 2009. Since then, they have climbed 75%, yet are still yielding a small number of graduates for one of the hottest jobs on the market. Compare programming completions (8,021 in 2013) to civil engineering (21,210).
- Nursing has the largest number of completions on the list (345,643), which lines up with nationwide growth in health care jobs.
- Psychology is one of the least lucky jobs to have during hard economic times, yet completions in psychology grew 7% during the recession and 22% in the lean years immediately following. 2013 saw a huge number of completions (163,456).
|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.
For more on EMSI’s employment data—available at the county, MSA, and ZIP code level—or to see data for your region, email Josh Wright. Follow EMSI on Twitter (@DesktopEcon) or check us out on LinkedIn and Facebook.