Navigating the Labor Market: A Comprehensive Look at College Graduate Outcomes by Major

For decades, a college degree has been seen as a reliable pathway to economic security, offering lower unemployment rates, faster job-finding speeds, and more stable employment compared to a high school diploma. However, the labor market is constantly evolving, and it's crucial to understand how different college majors fare in terms of employment outcomes. This article examines the labor market outcomes of college graduates by major, exploring unemployment rates, underemployment, and early-career earnings.

The Shifting Landscape for Young College Graduates

The post-pandemic labor market presents a nuanced picture for young college graduates. While a college degree generally still confers significant benefits, there are signs of diminished prospects for some. Recent reports and analyses suggest that young graduates are experiencing higher-than-average unemployment rates compared to the broader population. There are widespread reports of difficulties in finding employment and stories of contractions in the tech industry.

A recent Economic Commentary highlights a narrowing of the unemployment gap between young high school and college graduates (aged 22-27). This convergence coincides with a decline in the job-finding rate for young college graduates that began around 2000. The job-finding rate for young college-educated workers has recently declined to be roughly in line with the rate for young high-school-educated workers, indicating that a long period of relatively easier job-finding prospects for college grads has ended.

Unemployment Trends: A Closer Look

Analyzing unemployment trends for young high school and college workers since 1976 reveals some interesting patterns. High school workers have historically had a higher and more procyclical unemployment rate. However, this gap has narrowed recently. The unemployment gap oscillated around 5 percentage points for decades before climbing steeply after the 2008 financial crisis as high school workers particularly struggled with re-employment. Since then, the gap has steadily narrowed except for a brief pandemic-related spike.

Despite the convergence in job-finding rates, young college graduates maintain advantages in job stability and compensation once hired.

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Best College Degrees for Employment

Choosing the right college degree can significantly impact long-term career prospects. The best college degrees for employment are aligned with fast-growing industries, strong hiring demand, and competitive earning potential.

A new report evaluates 74 college majors to identify the best degrees for graduates entering the job market. The top-ranked majors show a clear dominance of STEM and healthcare fields. Degrees such as nursing, mathematics, computer science, and various branches of engineering consistently offer low unemployment rates and strong growth potential.

STEM degrees, especially in engineering, computer science, and mathematics, lead across all key employment metrics, offering low unemployment rates, high starting salaries, and long-term demand. Healthcare fields also rank highly, with nursing topping the list due to its exceptional job security and national demand.

High Unemployment Majors

Among recent college graduates, some majors have faced higher unemployment rates than others. According to a newly released Federal Reserve Bank of New York study, anthropology majors had the highest rate of unemployment at 7.9%. Other majors with high unemployment rates include:

Computer engineering (7.8%)
Fine arts (7.7%)
Performing arts (7.0%)
Computer science (7.0%)
Architecture (6.8%)
Art history (6.7%)
Physics (6.6%)
Early childhood education (6.6%)
Environmental studies (6.3%)

While the poor employment prospects for majors in the fine and performing arts are not surprising, the inclusion of computer engineering and computer science is notable. These fields, long considered reliable pathways to good jobs, appear to be facing new hiring headwinds, potentially due to the impact of the AI revolution on the job market.

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However, it's important to consider the limitations of this data. The confidence intervals around these estimates are quite large, making it difficult to draw firm conclusions about the returns to particular majors.

Underemployment: Another Piece of the Puzzle

Underemployment, defined as the share of graduates working in jobs that typically do not require a college degree, is another important measure of labor market participation. Overall, 42% of recent college graduates were classified as underemployed, the highest level since 2020.

Majors in the arts, humanities, and social sciences accounted for most of the highest rates of underemployment among recent graduates. The highest rate was experienced by criminal justice majors at 65.8%, followed closely by performing arts at 63.9%. Other majors with high underemployment rates include:

Fine arts (58.9%)
Leisure and hospitality (58.1%)
Agriculture (57.1%)
Anthropology (55.3%)
Liberal arts (54.6%)
Foreign language (54.0%)
Animal and plant sciences (53.5%)
Communications (53.0%)

Early-Career Earnings: A Different Perspective

While unemployment and underemployment rates provide valuable insights, early-career wages offer a different perspective on the value of different college majors. Computer engineering majors earned the highest early-career pay with a median of $90,000. They were followed by computer science majors at $87,000. Of the top 10 majors with the highest early-career wages, 9 were in engineering fields and one was in a closely related field - construction services.

Engineering majors also tend to have low rates of underemployment. Like nurses, who also enjoy low underemployment, engineering graduates may be less willing to settle for a job that undervalues their skills because they are confident they will ultimately be able to secure a more suitable, better-paying position.

Low Unemployment Majors: Surprises and Trade-offs

Looking at the other end of the unemployment distribution reveals some additional surprises. Recent special education majors had the lowest unemployment rate at .7%. They were followed by miscellaneous education (1.1%), elementary education (1.2%), agriculture (1.4%), foreign language (1.6%), geography (1.6%), engineering technologies (1.7%), social services (1.9%), nursing (2.1%), and secondary education (2.1%).

The strong performance of nursing majors is not surprising, but the fact that half of the top 10 for low unemployment rates were either education or social science majors is unexpected. However, high employment rates appear to involve a tradeoff with relatively low salaries.

Emerging High-Growth Opportunities

Some fields are emerging as high-growth opportunities even though they’ve traditionally ranked lower in employability lists. Cybersecurity, data analytics, renewable energy technology, and health informatics are examples of fast-evolving careers that didn’t exist, or weren’t mainstream, a decade ago. Students willing to enter these cutting-edge areas may benefit from rapid job creation, skill shortages, and high starting salaries.

Boosting Marketability: Options for Students with Lower Employment Prospects

Choosing a degree with lower employment prospects doesn’t have to limit your future. Students can boost their marketability through double majors, minors, or certifications in more technical or in-demand fields.

The Enduring Value of a College Education

Despite the challenges faced by some recent college graduates, the evidence overwhelmingly suggests that a college degree significantly improves one’s employment prospects and earnings potential. College-educated workers enjoy a substantial earnings premium. On an annual basis, median earnings for bachelor’s degree holders are significantly higher than those whose highest degree is a high school diploma. The earnings gap between college graduates and those with less education continues to widen.

Recent college graduates also weathered the Great Recession far better than their peers with a high school diploma. The jobless rate for bachelor’s degree holders is lower than for those with only a high school diploma. A college education is expected to become even more valuable.

Beyond securing a job and a steady income, a college education offers other benefits. Bachelor’s degree holders are more likely to have health insurance provided through their job, and they tend to have longer life expectancies.

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