The Earnings Argument Revisited

In an article on Forbes, economist Jeffrey Dorfman (University of Georgia) has analyzed data on the earnings potential for students majoring in the humanities. From the article,

Humanities degrees have received a bad rap recently, even from President Obama. Many people, including top policy makers, routinely push policies to encourage more students to major in STEM fields (science, technology, engineering, and mathematics). Some governors have even suggested that state subsidies for public universities should be focused on STEM disciplines, with less money going to “less useful” degrees such as the humanities. Yet, in contravention to this perceived truth, the data show that humanities degrees are still worth a great deal.

...I took the early and mid-career average salaries by major from PayScale.com and used those to estimate the annual average pay increase for each major’s graduates. Then I computed the present value of 45 working years of those gradually increasing salaries (the present value is the lump sum in dollars you would accept now in exchange for all those future salaries). I then subtracted the present value of the same 45 years worth of earnings from a high school degree. Thus, these are not lifetime earnings, but the value of additional earnings from a bachelor’s degree.

Here are the data Dorfman reports:

Major Early Career Salary Mid Career Salary Lifetime Earnings Gain
Art $36,100 $57,100 $315,500
Drama $35,600 $56,300 $302,400
English $38,700 $65,200 $444,700
French $40,900 $66,700 $470,900
History $39,700 $71,000 $537,800
Philosophy $41,700 $78,300 $658,900
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