FOR AMERICAN university students aiming to maximise their earnings potential, there are two strategies worth considering. The first is to gain admission to a highly selective school, thereby signalling one’s value to potential employers. The second is to pursue a lucrative field of study such as computer science or economics, rather than English or history. Students who can achieve both feats tend to earn the most; those who achieve neither, the least.
But which factor matters more? New data from America’s Department of Education, released on November 20th, help shed light on this question. The agency’s latest “college scorecard”, which compiles data on earnings by institution and field of study, yields two notable findings. First, it is only graduates from elite universities—those that admit less than one in four applicants—who enjoy high earnings one year after graduation. Those from merely good schools do not typically earn much more than those from less-selective institutions.
Second, graduates of top-ranked universities who opt to study mathematics and computer science significantly out-earn their peers who major in life sciences or liberal arts. Quant whizzes from the University of Pennsylvania fare best, earning a median annual income of $135,000 one year after graduation. (Their friends who studied biology earn only about a third as much.)
These data have their limitations. The college scorecard includes only data on graduates who applied for federal loans. This means that pupils from richer families are left out. It is also worth noting that graduates are rarely motivated by money alone, especially if they come from wealthy households.
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