Financial Return on Humanities Degrees


Jeffrey Dorfman, an economics professor at the University of Georgia, has analyzed the value of undergraduate degrees in a variety of fields and reports some of the results in a column at Forbes. Conventional wisdom may hold that philosophy and other humanities fields are “destined to produce underemployed graduates, struggling to pay off their student loans, and perhaps happy to work as Starbucks baristas,” but his data shows otherwise.

Here’s what he did:

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.

And here is what he found:

The present value of the extra earnings that graduates in humanities majors can expect over their lifetime is $302,400 for drama majors, $444,700 for English majors, $537,800 for history majors, and $658,900 for philosophy majors. If a person goes to a top-level, in-state, public university with no financial aid of any kind, the total cost is likely to run around $80,000 (tuition, books, and living expenses). That means the much maligned humanities majors are still getting an A in economics because the returns on their investments are quite high (in the 300 to 700 percent range).

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

 

UPDATE: Raised here: is philosophy’s good performance on this metric, relative to other humanities, owed to the wage gap between men and women?

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Anon.1
Anon.1
6 years ago

Sounds like great news. However, the report doesn’t make some important distinctions: 1. Are those higher paid jobs in any way tied to particular discipline (philosophy or history e.g.); 2. Did people studying philosophy ever imagine having such jobs; 3. How much philosophy is done through the jobs occupied by former phil students.
But I guess the 3rd one is a discussion on its own.Report

EnyFuleKno
EnyFuleKno
6 years ago

I’ve seen similar reports before, and while they’re pretty heartening evidence against the sillier version of the “you will work in retail forever” consensus, they don’t do what they’re supposed to insofar as they don’t show that the degree itself is responsible for the earnings. Two obvious objections to this set of data: 1) mightn’t this just reflect that people from posher backgrounds who do these degrees at higher rates than poorer students might work humanities-entry-level-jobs to begin with, but that they eventually filter back out into the kind of comfortable work that people from their background always find their way to? 2) this is past data covering a cohort of humanities students who studied those humanisms a career ago, and it might have worked for the baby boomers but it doesn’t tell us anything about how people doing humanities degrees today will fare.

On that basis, I’m less inclined to appeal to things like this than to the kind of research discussed in Academically Adrift and similar sources, which shows that humanities degrees improve basic reasoning and cognitive flexibility between matriculation and graduation far more than professional degrees, and comparably to hard-science degrees. That’s the sort of training we’d associate with sharp career-long increases in professional usefulness and hence with increased salaries.Report

Anon
Anon
6 years ago

I think the point about the Boomers hits the nail on the head. The job market today is not the job market then. I suspect we’re entering a period of history in which the supply of labor in the U.S. will perpetually outstrip demand for all but a few fields. If humanists want a future, we should think about how we can encourage students to double-major in humanities alongside business, engineering, etc, and shape programs to make that feasible where it is currently not.Report

Kenny
6 years ago

It seems very odd to compare the net present value of 45 years of work with a college degree to the net present value of 45 years of work without one. Surely one should compare the net present value of 41 years of work with a college degree to the net present value of 45 years of work without one (or some similar, number, possibly with a further correction for the fact that the college-educated work doesn’t start until several years farther in the future).Report

David Velleman
6 years ago

The problem with all of these articles is that they report lifetime earnings without taking into account the effect of early debt on the life course. None of the surveys measure whether the careers that pay the philosophy majors so much are careers that make them as happy as the ones they would have pursued if they hadn’t been weighed down with debt in their 20s — if they could have taken some time to look around before putting their noses to the grindstone. Are philosophy majors the sort of people whose lifetime well-being should be measured in terms of their lifetime income? The sort of people who view their college loans as a purely financial investment? Crushing debt in their 20s may be spoiling their lives even while swelling their bank accounts.Report

Anon Grad Student
Anon Grad Student
6 years ago

That’s pretty terrible analysis. Dorfman combines strawmanning his opposition with a misguided economic analysis.

There are good reasons to study philosophy. We should brag about those, and not merely parrot anyone who produces a flattering conclusion no matter how poor the reasoning. We’re supposed to be picky about arguments.Report

Elselijn
Elselijn
6 years ago

Also doesn’t look like he did any discounting for future earnings? 80.000 Dollars at the start of the degree is not obviously that much less – if less at all – than 300.000 twenty years later…Report

Atticus F
Atticus F
6 years ago

Lawyers. Students who majored in History, Philosophy, and PoliSci over the previous decades (to which this data refers) went into Law, disproportionate to students who major in Drama, English, and French who don’t go into (a probably lucrative, in previous decades) Law career. This kind of analysis isn’t about the utility *of philosophy,* it’s about the utility of *a career as a lawyer, to which a few majors funnel into, philosophy included.*

A better analysis would be (more recent data) on the financial success of PhD/graduate degrees. http://www.nytimes.com/2011/07/24/education/edlife/edl-24roi-t.html?pagewanted=all&_r=0

No one really thinks a career philosopher has the highest lifetime salary, do they? Of course not, but career attorneys do (did).Report