What degrees offer the best and worst ROI? (2024)

Among the most important factors determining projected ROI is undergraduate degree choice. This is because there are considerable differences in lifetime earnings across different majors. Grouping college majors into 13 broad categories, the New York Fed study found that the bachelor’s degrees with the highest rates of return include those under engineering (21%), maths and computers (18%), health (18%) and business (17%). In general, majors that tend to emphasize quantitative skills lead to the highest returns. But before you head over to your university registrar’s office to change your major, be aware that other factors might be at play. Here’s what the New York Fed researchers have to say:

“In presenting our findings, we emphasize that not all majors are feasible for every college student. For example, recent research has shown that graduating with a math or science major is more difficult than pursuing other fields of study. Thus, some of the economic return associated with particular majors may reflect differences in the abilities of the students who choose these majors, and not necessarily the skills obtained through majoring in these fields.”

In other words, when it comes to choosing your major, aptitude matters. Choosing a major that doesn’t align with your strengths or requires skills you don’t have increases the risks of a poor outcome (not to mention, might make you seriously unhappy). Recall that length of time in school and the likelihood of degree completion are important factors in determining your ROI. While you should be concerned with the wage premium of your degree, be aware of the dangers of choosing a major that is not right for you. Additionally, it’s possible that the variations in earnings across majors may be caused by other factors. Students select their majors, and this selection bias should be taken into account in your interpretation of these findings. Studies show that high school grades and standardized test scores, especially for math,vary among students who choose different majors. These differences in the abilities of the student may be the cause behind the earnings variation.

What about graduate school? Is getting an advanced degree really worth the extra buck? Here the financial picture gets more complicated. As a rule, comparing grad school costs and expected payoff post-grad school, we find that people with more education tend to make more on average. According to the Bureau of Labor Statistics, in 2013, the median annual wage for full-time workers with a master’s degree was$68,000; for full-time workers with a bachelor’s degree, the median annual wage was $56,000. Similarly, a 2011 report by the Georgetown Center on Education and the Workforce found that the median salary of graduate degree recipients is 25 percent more than that of peers with only a bachelor’s.

However, having a master’s or a doctorate under one’s belt isn’t always a surefire resume booster. Employability and wage payoff can vary wildly depending on your field of study and occupation. On the one hand, for leadership, administrative, or academic careers, an advanced degree may be required. The Bureau of Labor Statistics has very helpfully compiled alistof 33 occupations that typically require a master’s degree at the entry level. These occupations include anthropologists and archaeologists; educational, guidance, school, and vocational counselors; nurse practitioners; and sociologists, to name a few. Professional degree recipients in engineering or business, in addition, may find their starting salary prospects dramatically improved. But those in other occupational fields, like the arts or computer programming, may find that their advanced degree doesn’t translate as readily into a fatter paycheck, improved marketability, or instant opportunities for career advancement.

So while overall a graduate degree leads to higher earnings, the additional earnings return is determined for the most part by discipline. According to the Georgetown study cited above, the majors grouped under Biology and Life Sciences who go on to obtain a graduate degree in their field get an average earnings boost of 101 percent; under Business, 40 percent; under Computers and Mathematics, 31 percent; and under Arts, 23 percent. Be aware that specific majors within each of the broad categories may vary significantly. For example, let’s consider graduates in the Physical Sciences, who, on average, get an impressive earnings boost of 70 percent by attaining a graduate degree. At the extreme ends, graduates in the Science: Life/Physical subcategory get a boost of 86 percent, whereas those in Atmospheric Sciences and Meteorology earn only 1 percent more. For more information on your major, follow thislinkto the full report.

There’s less research on the wage premium of a doctoral degree (and a lot of the information out there is negative). A doctoral degree requires investing a significant amount of time in school—time that could be spent in the workforce—so the opportunity cost is huge. This investment is necessary if you want to go into academia, but if you’re thinking about pursuing a PhD for any other reason, know that the financial benefits are generally low. A 2016 article by the Economistcitesa study in theJournal of Higher Education Policy and Management, which found the earnings premiums for master’s and doctoral degrees to be 23 and 26 percent, respectively. So while thereisan earnings premium for a doctoral degree, in general, you’d be better off with a master’s, which takes significantly less time to complete. “Only in medicine, other sciences, and business and financial studies is [the wage premium] high enough to be worthwhile,” the Economist reports.

Degrees with the worst average ROI