STUDY: UT SYSTEM HELPS BOOST GRADS’ EARNINGS
Alums fare better than other Texas or U.S. schools, researchers say.
Workers who received bachelor’s degrees from University of Texas System schools tend to earn more than their peers who graduated from other Texas or U.S. universities, with choice of major exerting the most influence on future earnings, according to a study released Wednesday.
Researchers at the Georgetown University Center on Education and the Workforce found that UT System graduates earned a median salary of $39,600 three years after graduation.
All Texas workers with a bachelor’s degree earned $36,800 at the same point after graduation, and similar workers nationwide earned $34,000, according to the report, called “Major Matters Most.”
“The higher earnings of UT System graduates suggest that a UT System bachelor’s degree is a high quality credential,” the report said.
Moreover, the study found, UT System graduates had median earnings 54 percent higher than similarly aged workers with associate degrees, and almost double the earnings of those with just high school diplomas.
“If you canvass headlines in the news today, a lot of people who question the value of higher education and champion those who haven’t gone on to receive a degree,” said Stephanie Bond Huie, UT System vice chancellor for strategic initiatives. “Now, as an institution, we have some solid numbers and facts that say ... you’ll make more than people with a high school diploma or an associate degree.”
The report, based on a new data-gathering and -sharing partnership between the UT System and the Georgetown center, provides the first look at earnings specific to graduates of the UT schools. That gives administrators a valuable new tool for advising students and appraising pro-
Students who graduated from UT-Austin and the other most-selective UT schools tended to see higher earnings — at the median, almost $5,000 more than the middle tier of the system’s universities.
grams, Huie said.
“We can give them the information to make the best decision” that aligns their personal, academic and financial interests, she said.
While the earnings advantage was clear, researchers noted that the precise causes would require more study. A number of factors — both related and unrelated to the schools, their students and the quality of their educational programs — could influence the gap.
As one might expect, universities that rank higher on various quality indexes, as several UT System schools do, typically correlate with higher earnings for graduates, said Megan Fasules, a research economist at the Georgetown center.
But even with the UT System itself, the choice of institution made a notable difference in later earnings, Fasules and her colleagues found. Students who graduated from UT-Austin and the other most-selective UT schools tended to see higher earnings — at the median, almost $5,000 more than the middle tier of the system’s universities.
Yet factors outside the control of the administration, faculty or student body also appear to influence those earnings figures.
“This research looked at a period not long after the great recession, and Texas was definitely a more resilient economy than the rest of the nation,” Fasules said. “So that’s a non-institutional factor that could go into the higher earnings, too.”
What the report clearly showed, however, was the distinct gains certain majors delivered over others. The difference between the highest-paying major (architecture and engineering) and the lowest-paying (biology and life sciences) was almost $40,000 a year.
Fasules noted that fields such as biology tend to see larger numbers of graduates enter post-graduate programs, such as medical school, and that might lower the median earnings seen three years after graduation. Still, a student’s choice of undergraduate major has the single largest impact on his or her subsequent earnings, the study found.
That held true across a range of demographic factors, including race, income and gender. However, other factors had a significant impact on the various advantages and disadvantages that played out across various demographic groups.
For example, male UT System graduates earn, on average, $6,000 more than female graduates three years after graduation, the study found. Yet in fields dominated by female graduates, women earned more at the beginning of their careers than men — only to see that advantage disappear as time passed.
That trend matched what research has found nationwide. Overall women’s earnings plateau or drop, as many opt to have children and few can access corporate programs that provide for flexible schedules or other ways to preserve earnings.
The study also found that the UT System as a whole helped close the gap between students from low-income and higher-income families. While Pell Grant recipients go on to earn less than their counterparts across the entire UT System, that shortfall disappears after adjusting for different choice of major and the tendency for lower-income students to go to less-selective UT campuses.
Choice of major and campus also influenced the comparatively low earnings of Latino and African-American graduates, but the types of jobs they were in might play a more worrisome role, the report suggested.
Median earnings for Hispanic and black graduates were $6,000 less than their white and Asian counterparts, in part because a larger percentage of them would take lower-paying occupations within their field.
Both Hispanic and white graduates in architecture and engineering worked primarily in science, technology, engineering or math jobs, for example, but Latinos were far more likely to work in blue-collar occupations within those industries — 17 percent compared with 8 percent.
“Majoring in a high-paying major does not always translate into working in a high-paying occupation,” the report said.