Which College Majors Pay the Most in Hawaiʻi and the US?

by Rachel Inafuku and Tim Halliday, UHERO, August 22, 2024

Despite recent discussions in the popular press, a college degree is well worth its investment. In a recent UHERO report, we demonstrated that the lifetime earnings of graduates from the University of Hawaiʻi (UH) with bachelor’s degrees were 27% higher than those of observationally similar people who exited UH without their degrees. Moreover, accounting for the cost of tuition or borrowing to pay for college does not alter our conclusions. The bottom line is that people with college degrees generally earn substantially more than non-graduates.

As labor economists, this result did not surprise us. A widely recognized finding in labor economics is that additional years of schooling cause earnings to increase. In fact, research indicates that an additional year of higher education typically raises earnings by 10%. Our study, using high-quality administrative data from the UH system, demonstrated that the returns to a degree are largely consistent with the broader literature.

Nevertheless, despite the evidence, many Americans and Kamaʻaina remain skeptical of the financial benefits of a college degree. Part of the disconnect between the evidence and public sentiment could be that some college majors confer extremely high financial rewards, whereas the returns for others may not outweigh the cost of tuition. A 2015 study by the Georgetown Center for Education and the Workforce highlighted significant disparities in earnings across different college majors. The study found that in their mid to late 20s, median salaries for early childhood education majors were less than $40,000 per year, while petroleum engineering majors earned nearly $100,000 more, with annual salaries of $136,000.

In this blog, we shed light on how the returns to different fields of study vary both in the United States and Hawaiʻi. Using data from the American Community Survey (ACS), we estimate the returns to college majors across US states, highlighting similarities and differences between Hawaiʻi and the rest of the nation. Specifically, we evaluate the returns to various fields of study based on post-graduation earnings for bachelor’s degree holders in Hawaiʻi and across the US.[1] The data from the ACS consists of individuals and housing units representing roughly 1% of the US population per year for the years 2015-2019 and 2021-2022. We only include individuals who are in the labor force and are between the ages of 21 and 65, inclusive. The individuals in our sample also have at least a bachelor’s degree and earn greater than zero dollars per year in a given sample year. We observe 35 total fields of study. The majors in our sample are categorized based on the ACS college degree fields. Altogether, there are roughly 3.5 million person-year observations in our sample.

We initiate our analysis by ranking college majors in the US based on estimated mid-career earnings (Table 1). Individuals in the top ten majors can expect to reach six-figure salaries in their mid-career. Majors yielding the highest projected mid-career earnings include engineering, economics, and computer and information sciences, with mid-career salaries ranging from $113,000 to $121,000 on average. In contrast, majors like theology and religious vocations, cosmetology services and culinary arts, and fine arts are at the lower end of the spectrum, with theology majors specifically projected to earn the lowest, at roughly $55,000.

Table 1: The Top and Bottom 10 College Majors in the US Ranked by Estimated Mid-Career Earnings

We now turn to Hawaiʻi. Science-related fields dominate the top majors in terms of potential earnings. Among the 35 observed majors (see Table 2), those in medical and health sciences are projected to have the highest mid-career earnings, at just under $107,000. This category includes fields such as nursing and dental assisting. Following closely are majors in the physical sciences and biology and life sciences, which rank third and fourth, respectively, in terms of earnings. Engineering and economics majors also appear in the top five. On the other end of the spectrum, the lowest projected mid-career earnings are found in fine arts, theology and religious vocations, and public affairs, policy, and social work.

Table 2: The Top and Bottom 10 College Majors in Hawaiʻi Ranked by Estimated Mid-Career Earnings

When comparing the estimated earnings for college graduates in Hawaiʻi to those in the US, it is clear that the income range is considerably more compressed in Hawaiʻi. Only three of the top ten majors in Hawaiʻi reach six-figure salaries by mid-career, and these top earners still earn considerably less than the top three majors across the US. On the other hand, the lowest-earning majors in Hawaiʻi earn more than the lowest-earning majors at the national level. Additionally, the earnings gap between the highest and lowest-paying majors is narrower in Hawaiʻi. This compression in earnings is consistent with expectations, given the economy’s heavy reliance on tourism and its lower levels of economic diversity and income inequality compared to other states.

Notably, we observe that earnings in the medical and health sciences remain roughly the same in both Hawaiʻi and the United States. However, while this field pays the highest in Hawaiʻi, it ranks only eighth in the United States. The primary difference between Hawaiʻi and the rest of the country lies in the much lower returns to STEM fields within the state. For example, the average US computer and information science major earns nearly $20,000 more than the average Hawaiʻi graduate. This disparity reflects various factors, with weak labor demand being a key issue. Currently, graduates with STEM degrees find much higher financial returns if they leave Hawaiʻi. This situation underscores a major challenge for state policymakers who aim to diversify the state’s economy into high-paying sectors.

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