Ag Economics, Agribusiness Degrees Offer Salary Benefits

By David Lambert, Department Head, Agricultural Economics

New data available from the U.S. Census Bureau’s American Community Survey permits comparisons of earnings by college graduates based on major.

Researchers at Georgetown University’s Center on Education and the Workforce have collected and analyzed earnings data from the ACS. The full report can be downloaded at the Georgetown site: http://cew.georgetown.edu/whatsitworth.

The sample contains information on 171 college majors in 15 major categories. The total sample has earnings data for nearly 34 million Americans.

Students receiving undergraduate degrees in business compose the largest group (25.0 percent). Students majoring in agriculture and natural resources comprise 1.6 percent of the sample. Agricultural economics majors comprise 6 percent (32,427 graduates) of the students graduating within the agriculture and natural resource category.

The unique feature of the report is the characterization of earnings’ distributions by major. Instead of such frequently reported figures as average earnings of a college graduate are 84 percent higher than individuals with just a high school diploma, lifetime earnings from individual majors are reported.

For example, lifetime earnings for students majoring in engineering are $1,090,000. Education majors earn on average $241,000 over their working lifetimes. Correlated with these lifetime earnings estimates are median incomes by major. Median income for individuals with a bachelor’s degree in petroleum engineering is $120,000 per year.

Median income for individuals with a bachelor’s degree in counseling/psychology, the lowest reported median income, is $29,000 per year. The income figures are for all full-time workers regardless of graduation date, and thus do not represent starting salaries.

Within the agriculture and natural resource category, the highest median income is earned by people with degrees in Food Science ($65,000). Agricultural economics graduates are tied in second place (with Forestry), with a median income of $60,000 per year. Earnings at the 25 percent (75 percent) percentile for agricultural economics graduates are $39,000 ($92,000).

This initial report suffers from many of the problems of preliminary analyses, such as failing to account for time in the workplace, current occupations, and other conditioning factors. However, these failings aside, the report provides preliminary estimates of the value of a graduate (i.e., post-B.S.) degree (40 percent salary boost), and gender and racial characteristics of agricultural economics graduates. Unfortunately, sample sizes were too small to determine income gaps due to gender and race. On a positive note, 98 percent of the respondents with undergraduate degrees in agricultural economics are employed, tied for first among the agriculture and natural resource majors.

Although these results might persuade a high school student to focus on university studies in petroleum engineering, the report strengthens the argument for studying agricultural economics (and, by extension, agribusiness). The earnings distribution is high relative to all agriculture and natural resource fields. Median incomes also compare favorably with those reported for business majors. Employment prospects are good.

These findings just support the conclusion that 350 K-State students choosing to major in agricultural economics (and agribusiness) have already exhibited fantastic critical thinking and decision making skills!

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