Their survey covered UT Austin alumni between the ages of 23 and 43, revealing enormous variations in average earnings between different majors. Not surprisingly, the business majors and engineers tend to be high earners. However, the highest earners of all are the Plan II (honors college) alumni, who have by far the highest average SAT scores (1364). Note the huge variance within each major (SD = number in parentheses below the mean value), in particular for business, natural sciences and Plan II. For these majors the standard deviation is larger than the mean, suggesting, perhaps, that a few millionaires (startup founders, entrepreneurs?) are skewing the results.
The effect of college curriculum on earnings: ...Clearly, there are large differences across major in average earnings, with the highest-earning majors (Honors Plan II, and "Hard" Business) having averages almost three times that of the lowest (Education). Much of the differences across majors must be due to differences in what the students bring to and do at the University. Students in the higher-earning majors generally have higher SAT totals upon entry, and the fractions of students taking upper-division math and science courses and doing well in them are greater too. The differences are also consistent with the results of differential effort in the labor market and male-female differences in earnings. Thus respondents in the higher-earning majors tend to state that they work longer hours than those in lower-earning majors; and except for the Honors Plan II major, the fraction of women in the higher-earning majors is lower. On the other hand, advanced degrees are more prevalent among those graduates who have majored in subjects that eventually generate lower earnings. Family incomes in the areas where the students attended high school do not differ across majors ...
...Even within major, taking more upper-division science or math courses and doing better in them raise eventual earnings. While the effects are not highly significant statistically, the t-statistics generally exceed 1.28. A student who takes 15 credits of upper-division science and math courses and obtains a B average in them will earn about 10 percent more than an otherwise identical student in the same major ... who takes no upper-division classes in these areas. There is clearly a return to taking these difficult courses. This holds true even after we have adjusted for differences in mathematical ability by using the total SAT score ... . The importance of access to this information should not be underestimated. Estimated earnings differences across majors are substantially higher (e.g., the premium for "hard" business rises to 64 log points, that for engineering to 50 log points) when the information on science and math courses is excluded from the equation in Column (1).
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