This document discusses factors to consider when choosing a college major, including financial prospects, interests, and skills. It notes that the choice of major determines required coursework and influences future career options and earnings. While engineering majors typically lead to highest starting salaries, many students prioritize non-financial rewards and select more popular majors like business, psychology, nursing or education that offer less monetary compensation but greater work satisfaction. The imbalance between the supply of graduates in certain fields and demand in the job market also impacts earning potential. The document encourages students not to stress over the decision and emphasizes most students change majors at least once.

1. Sooner or later, the question is going to
come up- i.e. “What’s your major?” For
freshmen, that question is often intimidating.
How are you supposed to choose? There
are dozens of possibilities- most of which
you know nothing about. Should you major
in economics? Maybe by the end of this
semester, you’ll know if that’s a good idea.
But how about engineering, biotechnology,
or computer science? Sound too technical?
Are you looking for a major with less math
and more “people skills,” departments like
education, government, or maybe even social
work?
The choice of a major field of study has a
huge effect on your course selections. If you
plan to major in economics, you’re going to
have to enroll in statistics or math at some
point. If you plan to become a veterinarian,
you’ll have to take a slew of biology, physics,
and chemistry courses. All the engineering
programs have lots of math and science
prerequisites. Journalism majors have to
take courses in English, social sciences,
and multimedia technology. Choosing a
major pretty much locks you in to a multi-
year string of prerequisites and other course
requirements.
The Salary Payoff
Money is often a serious consideration in

2. choosing a major. Some careers are far more
lucrative than others. So the financial payoff
to college completion depends heavily
on which major you choose. Every year
Payscale.com documents how much those
payoffs vary. In its 2010-11 survey, Payscale.
com discovered that the top 5 highest-paying
undergraduate majors were all in engineering
fields, namely:
In case you’re wondering, economic majors
do pretty well, with starting salaries averaging
$48,800 and mid-career earnings of $97,800.
That’s far higher than other social sciences and
even beats out a lot of engineering fields (e.g.
industrial, mechanical, civil, environmental)
and most “hard” science fields (e.g. chemistry,
biochemistry, microbiology).
Money Ain’t Everything
The comparatively high pay for econ
majors is attractive. But, as the Beatles once
crooned, money doesn’t buy you love. Even
economists understand that money isn’t the
only consideration in choosing a major or
career. People want to enjoy their work, have
some sense of personal fulfillment, maybe
even a sense that they are contributing
something worthwhile to society. A social
worker in Portland -who majored in Child
and Family Studies, the lowest-paying major
on the Payscale.com list- emphasized this
perspective when she said “It sucks not to
make as much money as someone else who is
doing something less emotionally challenging,
but that’s the way it is, and I feel lucky to be

3. able to help people and go home at night and
feel like I accomplished something” (quoted
in CNNMoney.com, August 5, 2010).
Economists aren’t immune to such
nonpecuniary considerations. In fact, they
characterize the pay-off to a job in very broad
terms. In the vocabulary of economics, the
pay-off to a job is its marginal utility, the
added satisfaction one gets from doing a job.
That marginal utility encompasses both the
pecuniary rewards (i.e. the paycheck) as well
as the nonpecuniary rewards (e.g., emotional
satisfaction). Some people put more weight
on the pecuniary rewards. Others, like the
just-quoted social worker, put more emphasis
on the nonpecuniary rewards. Just about
everyone, however, confronts a trade-off
between the two. Even the social worker
might pursue another career if the pay got
much lower.
Surveys reveal how important the
nonpecuniary factors are in career choices.
The list of the most popular majors doesn’t
look anything like the most lucrative list
highlighted above. According to the Princeton
Review, the 5 most popular majors are:
• Business administration/management
• Psychology
• Nursing
• Biology/biological sciences
• Education

4. None of these majors appears in the top fifty
of the salary rankings. Clearly, nonpecuniary
factors play a huge role in career choice.
Supply and Demand
The discrepancies between the most
popular and most lucrative college majors
help explain why engineers make so much
money while social workers earn so little.
Every year there is a flood of new graduates
with business, psychology and education
degrees. This represents a huge supply of
potential workers, all seeking similar jobs.
That large quantity supplied represents a
lot of competition for available jobs in those
fields. This gives employers a lot of power to
select the employees they want…and to keep
wages relatively low.
The Economy Today
NEWS FLASH
Newsletter for Teachers of Economics to accompany Bradley R.
Schiller’s The Economy Today and Essentials of Economics
texts.
August 2010
(continued on back)
P i c k i n g a C o l l e g e M a j o r
College Major Median Starting Pay Mid-Career Median Pay
Petroleum Engineering $93,000 $157,000
Chemical Engineering 64,800 108,000
Aerospace Engineering 59,400 108,000

5. Electrical Engineering 60,800 104,000
Nuclear Engineering 63,900 104,000
Other majors generated much less post-graduate pay. The 5
lowest paying majors are:
Culinary Arts $35,900 $50,600
Athletic Training 32,800 45,700
Social Work 31,800 44,900
Elementary Education 31,600 44,400
Child and Family Studies 29,500 38,400
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By contrast, so few students major in
engineering that there is little competition
on the supply side of the labor market. In
fact, more students get bartending degrees
than get materials engineering degrees! Even
more startling is the observation that more
students get degrees in massage therapy than
the top 4 engineering fields (civil, chemical,
industrial, engineering) combined. As a
result, employers must compete vigorously
to obtain a freshly-minted engineer. They

6. bid for scarce engineering talent by offering
high wages. So engineers end up with big
paychecks while social workers struggle to
pay their own rent.
Making a Choice
Does all this information help you choose
a major? Perhaps. You need to decide
how important money is, relative to the
nonpecuniary dimensions of a job. Are you
willing to forsake a higher salary for greater
work satisfaction? Do you have to? Are you
one of those lucky people (e.g. engineers),
who can get both?
Don’t fret if you haven’t yet decided. Eight
out of ten freshmen don’t declare a major in
their first year. And most of those who do
declare a major in their freshman year change
their major before they graduate—sometimes
two or three times.
Web Note: For a complete ranking of most
lucrative college majors, visit payscale.com
(“2010-11 College Salary Report”)
Issue: August 2010
TopIc: Picking a College Major
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service provided by McGraw-Hill/Irwin
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[email protected]
Bradley R. Schiller
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