AUSTIN, Texas—A new study shows that hours worked, gender and an advanced degree, as well as choice of major, are the primary influences on lifetime earnings for graduates of The University of Texas at Austin.
The study, "Report on the Earnings of UT Graduates: The Effect of College Major," also shows that the earnings of The University of Texas at Austin graduates exceed comparable national and state estimates for college graduates by more than 40 percent.
Dr. Daniel Hamermesh, the Edward Everett Hale Centennial professor of economics in the College of Liberal Arts, surveyed a total of 2005 graduates from the classes of 1980, 1985, 1990, 1995 and 2000 about their 2001 earnings. He found that the average annual earnings were $89,110, with median earnings of $60,000.
The goal of the study was to discover how earnings vary over an adult lifetime depending on undergraduate major, Hamermesh said in the report. The Andrew W. Mellon Foundation recently awarded a $40,000 grant to Hamermesh, to further analyze the data.
"In general, UT graduates do very well in the labor market," Hamermesh said. "There is a middle group of those who majored in Liberal Arts social sciences and Plan II, the soft business fields and natural sciences who earn similar amounts. At the same time, graduates in engineering and the hard business majors earn about 25 percent more than the main group, while graduates in architecture, fine arts, liberal arts humanities and education earn about 25 percent less than the middle group."
Hamermesh examined the data by breaking down some of the larger colleges into small groups of similar fields, such as the Liberal Arts social sciences of anthropology, economics, geography, government, psychology and sociology. "Hard" business majors include accounting, actuarial science, engineering, data processing, finance and management information systems, while "soft" business fields are general business, management and marketing.
"We believe that the evidence presented here suggests that perceptions of the variations in economic success among graduates in different majors are exaggerated," Hamermesh said. "Our results imply that given a student’s ability, achievements and effort, his or her earnings do not vary all that greatly with the choice of undergraduate major at UT."
The questionnaire asked about current earnings, earnings history, current and previous occupational attachment, hours of work, postgraduate education and current family status. Once collected, these data were linked to administrative records on major, grade-point average, and SAT or ACT scores and high-school records submitted on admissions applications.
Another significant finding in the study is that female graduates of the university earn 22 percent less than otherwise identical male graduates, a statistic that Hamermesh said is on par with national statistics.
Grade-point averages do make a difference in earnings as well, with students achieving an A- earning about 8 percent more than those with a B- average. Attaining a terminal degree, whether it is a Ph.D. or a degree in law or medicine, raises earnings about 15 percent.
For further information contact: Daniel Hamermesh (512) 475-8526.
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Dec 04, 2023