UTSA study aims to educate students on economic realities of a college degree

JANUARY 19, 2022 — Since grade school, all students have faced the question, “What do you want to be when you grow up?”

As they get older, that question turns into, “What is your major?”

While a student should be welcome to choose their major, a new study by the UTSA Urban Education Institute (UEI) suggests students should also be aware of the economic consequences that come with that choice.

Titled, “Education Pays, But It Pays More for Some Than Others: A Correlational Study of Education Attainment, Industry and Earnings,” the research explores which higher-education degrees and certificates can lead to higher wages, and how earnings are affected based on what a person chooses to study. The study also dives into the issue of wage gaps between the sexes and between racial and ethnic groups.

“The people and families of San Antonio have powerful aspirations for higher education and a better life.”

“Our team is very interested in both educational attainment and economic mobility. This is an important set of factors for our community,” said Mike Villarreal, UEI director. “The people and families of San Antonio have powerful aspirations for higher education and a better life. With funding from the MITRE Corporation, we were able to dig into this topic and begin exploring the relationships between fields of study in college and future earnings.”

This correlational study, which focused on the education-wage relationship, looked at individuals between the ages of 16 to 64 who were employed in Texas from 2005 to 2017 with high school diplomas, community college certificates, associate degrees, bachelor's degrees and graduate degrees.

The study found that as a person attained more formal education, their annual wages grew, with a graduate degree earning individuals the highest wages.

While obtaining a higher level of education led to increased wages, only certain levels of education resulted in a huge difference. Someone with only a high school diploma who earned a community college certificate, for example, saw their wages increase by 145%. The second largest gain happened to someone with a bachelor’s who earned a graduate degree. They saw their wages increase by 75%.

The research also shows that females earn about 13% less than males on average after holding constant age, race and ethnicity, level of education, and college major. Women even reached higher levels of education than men, with 68% of them earning some postsecondary education before entering the workforce, compared to 53% of the men.

• • People who identified as White ranked third in wages among all racial groups studied. However, after controlling for educational attainment and college major, people who identified as White earned more than all other racial groups.
  • Asians were more likely to earn postsecondary credentials in STEM fields of study and find employment in STEM-related industries. Their choice of college majors largely explained why they were ranked the highest earners overall before controlling for education.
  • The payoff of higher education was greatest for those who pursued STEM-related majors and majors in legal studies, business and construction trades.

While it’s true that someone who has a higher degree can earn higher wages, a certificate in the right field of study can earn more than those with an associate, bachelor’s, or graduate degrees in other fields.

Among those industries where a certificate can mean higher wages are the science technologies, where individual can earn $61,642 a year — more than twice of the median wage, $28,092, of what all other certificate holders can earn. 

“San Antonio has an above-average share of families living in poverty,” Villarreal said. “So, this research is highly relevant for our young people, their parents, and really any adult who wants to acquire marketable skills to increase their financial independence. It’s going to help them make better informed decisions.”

“Too often, information like this isn’t available for those who need it the most. This includes not just our students but also education leaders”, Villarreal said.

By making this information readily available, students will make more informed college and career decisions. And education leaders should be completed to think how to design curriculum and degree programs so that students from all majors leave college with marketable skills, he added.

“These results are already making an impact. I talked to a friend who had the report printed out at home over the holidays. My friend’s grandchildren came home to visit—they're college students—and they opened it up and said, ‘Oh look! We’re majoring in business, and here are our earnings. Oh wow! We can double our earnings if we get a master’s. We’re definitely getting our master’s,’” Villarreal said. “Their grandfather was tickled that his grandkids were so engaged that they took the report with them, excited about their education and their future careers.”

— Valerie Bustamante Johnson