pull down to refresh

Which College Degrees Have the Best Return on Investment?
488 sats \ 14 comments \ @jakoyoh629 19 Oct 2024 charts_and_numbers
Career prospects, and especially expected lifetime salaries, can be a strong motivator or deterrent in pursuing certain college degrees.
Not all degrees guarantee higher lifetime earnings compared to entering the workforce after high school without a degree—as some degrees may end up costing more than their financial benefits.
This graphic shows the average return on investment of a degree in the U.S., based on analysis from CollegeNPV of data from the U.S. Department of Education and Bureau of Labor Statistics.
The return on investment of a degree is the expected lifetime value of the degree (net of debt) compared to entering the workforce after high school.
https://www.visualcapitalist.com/which-college-degrees-have-the-greatest-return-on-investment/
write
preview
related posts
109 sats \ 12 replies \ @Undisciplined 19 Oct 2024
It's very important to understand that those aren't really the return to the degrees themselves.
Almost all of those returns are earned by the top 10% of each cohort, with returns being basically zero for the other 90% of the students.
reply
40 sats \ 3 replies \ @cryotosensei 19 Oct 2024
10% of the graduates from each college or the bulk share of the graduates from the top 10% of colleges (or even limited to the Ivy Leagues)?
reply
24 sats \ 2 replies \ @Undisciplined 19 Oct 2024
IIRC, it was the top 10% of students in each class in the small set of majors that have significant returns (engineering, chemistry, etc.).
I don't remember what the sample was, but it definitely wasn't all students in America, so I don't think he could say how top schools compare to average ones. I would expect the basic pattern to hold, though, with the top few students reaping in the bulk of returns.
reply
36 sats \ 1 reply \ @cryotosensei 19 Oct 2024
It’s a relief to know that hardworking students from lesser known colleges could avail themselves of the lion’s share of the pie if they focus their minds on excellence and outperforming their peers!
reply
0 sats \ 0 replies \ @Undisciplined 19 Oct 2024
The hardest part of doing this kind of research is estimating what those students would have earned without the degrees, because smart hardworking people tend to earn a lot regardless.
reply
38 sats \ 1 reply \ @Signal312 19 Oct 2024
Interesting. Could you elaborate?
reply
188 sats \ 0 replies \ @Undisciplined 19 Oct 2024
This is based on work that a visiting researcher presented at my university. I don't remember his name, but I could probably look it up.
He had data on individual student performance and their later earnings, which let him see the distribution of earnings within a class/major.
What he found was that only the top few students in each class had statistically significant returns from college and only in STEM fields.
For most of us this will probably ring fairly true, since we can think of who those top few students were in our own classes. They were probably super smart and hardworking, which makes it unsurprising that they went on to earn a ton of money. The rest of us more or less break even on college.
reply
22 sats \ 1 reply \ @jakoyoh629 OP 19 Oct 2024
Because the graph is just an average, doesn't it make more sense to say that these 10% will make more than these numbers?
https://www.reddit.com/media?url=https%3A%2F%2Fpreview.redd.it%2Fcollege-return-on-investment-v0-ldrr2787ynkd1.png%3Fauto%3Dwebp%26s%3D4e995400476002374c6f68706d557bb1fdb4e5f6
reply
29 sats \ 0 replies \ @Undisciplined 19 Oct 2024
The important part for people to understand isn't that the top 10% make more than average, that's obvious, the point is that the return is insignificant for everyone else.
Unless you're a top student going into those particular fields, you shouldn't be thinking of college as a financial opportunity. People should go to college because they're passionate about studying something or want to have a career that requires a particular degree.
reply
20 sats \ 3 replies \ @WeAreAllSatoshi 19 Oct 2024
Top 10% feels a little steep, no? I suspect more than the top 10% of my engineering class is earning good money working in the field
reply
100 sats \ 2 replies \ @Undisciplined 19 Oct 2024
These are returns to those degrees, though. That means you have to attempt to account for how much your engineering peers would have earned otherwise. Since they are fairly smart people that probably would have been a decent amount.
It would be a methodological mistake to attribute all future earnings to the degree.
reply
37 sats \ 1 reply \ @WeAreAllSatoshi 19 Oct 2024
That’s true. The degrees often get you started, but beyond that, most of the success is based on your work in the field (hopefully)
reply
23 sats \ 0 replies \ @Undisciplined 19 Oct 2024
And, let's say you're earning $100k right out of college, you have to account for what you would have earned and been earning after 4 or 5 in the workforce. That might easily be $60k or more for those particular people.
So, there would be something like $200k of foregone earnings compared to something like $50k of student debt + interest. When you're earning an extra $40k it takes most of the next decade to break even.
reply
0 sats \ 0 replies \ @chaoticalHeavy 19 Oct 2024
The way I read this is "how much money will you have when you retire?". It seems a little conservative for Engineering though.
reply