Neither a liberal arts degree nor any other is a guarantee

A response to a Brookings article

It appears that this is the time of year to promote the value of a liberal arts degree. With my piece, Is a Humanities Degree Worth It?, I already responded to a Chronicle article on the subject. A recent Brookings piece, Don’t knock the economic value of majoring in the liberal arts (12/4/2023), had me thinking further about this topic. The problem is that these publications compare medians or means by group, and the implication is that you will make more with a degree, while what we really want is a statement of the chance that you will earn more.

The data used in the Brookings article comes from the American Community Survey, which may be found on the IPUMS (Integrated Public Use Microdata Series) website. For comparison, I'll use the same definition of a liberal arts degree:

Using the categories provided in the ACS, I’ve defined “liberal arts” majors as “Area, Ethnic, and Civilization Studies,” “Linguistics and Foreign Languages,” “English Language, Literature, and Composition,” “Liberal Arts and Humanities,” “Fine Arts,” and “History.” Everything else I’m categorizing as “not liberal arts.”

I'll also stick with the same age range, 23–65. I've additionally weighted the data in all cases. This means that in the data, each person is supposed to represent a particular number of people in the general population. This factor is used to weight results. The Brookings article does not specify which income variable was used. In the American Community Survey Data, there is total income, income from all sources, and earned income, “income earned from wages or a person's own business or farm for the previous year.”

Figure 3 shows the main graph from the Brookings piece, and there are instantly two issues. First, the author uses means, although medians are reported in the article. Outliers have an effect on means; hence, they should not be used in this graph. Second, there are substantial differences between races. This was not my initial focus when I started to investigate the data, but the discrepancies are significant enough that I'm starting with median earned income by race (Figure 1).

Figure 1

I could go on and on about Figure 1, but I'll just make a few observations. First, an Asian student's median earned income is higher with an associate's degree than with a liberal arts degree. I'm not sure why, but I'm guessing that associate degrees are more heavily weighted toward technical subjects. Meanwhile, the median White student gains less than $4000 from a liberal arts degree over an associates degree, and an AIAN student gains a comparable amount. If, as the Brookings report suggests, the reason for a liberal arts degree is that it has economic worth, then for Asian, White, and AIAN students, not so much.

Asian students do poorly with a liberal arts degree, and the gain on the median is more than $20,000 for a non-liberal arts degree. Similarly, White students benefit greatly from a non-liberal arts degree. The growth for Black and Hispanic students is significantly lower. The main point here is that calculating the economic value of a degree is more complicated than just giving a mean or a median. I should also point out that there is no age or region adjustment here, which would complicate things.

Figure 2

For comparison purposes, Figure 2 is the same as Figure 1, but using mean earned income. Take note of the influence that outliers have. White non-liberal art earned income, for example, increased from $54,428 to $72,978. Income looks much better when we use means as compared to medians, but the median is a better representation of income. Figure 3, the Brookings graph, is far too simplistic and deceiving. I've added graphs of median and mean total income by race and education at the end of the article.

Figure 3

The distribution

Figure 4 shows the distribution of earned income by education level. My point with this graph is that there are plenty of high school graduates making more money than college graduates. Now, hopefully, you are questioning if age is a factor. Maybe.

Figure 4

Figure 5 is the same graph as Figure 4, but only for ages 23–33; this would be a traditional first 10 years out of college. These distributions still have a lot of overlap. Again, many high school graduates outperform college graduates monetarily. Okay, but as I mentioned before, race is an issue, so perhaps the higher-income high school graduates are white while the lower-earning college graduates are not.

Figure 5

Let’s look at just White people. I’m choosing Whites simply because they are a larger subpopulation. Figure 6 is all ages, and Figure 7 is just the 23–32 cohort.

Figure 6

Figure 7

The point remains the same. A college education does not guarantee a higher income. For example, the median liberal arts earnings in the White 23–32 cohort is $34,973, but the cutoff for the top 25% of high school earnings is $38,151. In other words, the top 25% of White 23–32 high school graduates make more than the bottom 50% of liberal arts majors and fare better than the bottom 25% of non-liberal arts degrees, which earn $24,000.

Final thoughts

I'll continue to argue that selling higher education on the basis of a return on investment is a flawed strategy. Similarly, the Brookings article, like many others of its sort, suggests a guaranteed economic gain. There are enough people with college degrees making less money than those without one to argue that higher education did not benefit them. In other words, there are enough people to question and challenge the narrative, and they have college debt.

Higher education needs to be more honest and look to quantify the likelihood that a student will do better with a degree than without one, but they won't because higher education, like any other business, requires customers.

I'd love to know what folks think about this in the comments. In addition to Thursday's Quick Takes, I anticipate a Classroom Connections on Saturday. Here are the two additional graphs that I promised.

Figure 8

Figure 9

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Disagreeing and using comments

I'd rather know the truth and understand the world than always be right. I'm not writing to upset or antagonize anyone on purpose, though I guess that could happen. I welcome dissent and disagreement in the comments. We all should be forced to articulate our viewpoints and change our minds when we need to, but we should also know that we can respectfully disagree and move on. So, if you think something said is wrong or misrepresented, then please share your viewpoint in the comments.