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Popular or Pragmatic: Considering College Instructional Program Decisions

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By Luke Greiner 
March 2021

With enrollments fluctuating and student interests changing, Minnesota’s higher education institutions can benefit from better understanding the relationship between the selection of major and the resulting employment outcomes that graduates experience. The intent of this article, along with its related interactive dashboards (which are included at the bottom of this article), is to help postsecondary educational institutions, administrators, policy makers, and college and career counselors understand the vastly different outcomes students can have after they graduate, depending upon the course of study they pursue.

Hundreds of millions of dollars of public money is spent on higher education in Minnesota, so it’s important to examine how resources are allocated and the returns on those investments. This article references two dashboards that compare employment results of graduates from different instructional programs (see Figure 1), and also look at wage outcomes from the graduates’ perspective by including cost of living and typical debt levels by program (see Figure 2).

The data used in this analysis to review program outcomes comes from the Graduate Employment Outcomes tool. The Graduate Employment Outcomes data reveal how many recent Minnesota graduates from private and public postsecondary institutions in Minnesota, as well as private career schools, found jobs at employers located in Minnesota after graduation. It also shows the median wages earned and the top industries – not occupations – where graduates found jobs. You can search by year, location, award type, institution, and instructional program. It is important to note that this tool only includes data on graduates from Minnesota postsecondary institutions and career schools who worked in Minnesota after graduation.

This article and the linked dashboards are intended to help answer the following questions:

  • How does the choice of major impact a graduate’s wage potential?
  • Are Minnesota colleges offering programs that help graduates find jobs that pay a living wage?
  • Which programs should higher education institutions prioritize when making funding decisions?

Variety of Outcomes

Predictably, there are a wide variety of outcomes that college graduates experience, and not all graduates benefit from the increased opportunities that college can provide. Completing college successfully does not guarantee employment success. While college is a worthwhile investment for many students, especially those in programs that lead to high- demand occupations, it is also clear that educational resources and labor market demand are not perfectly aligned. This means that higher education investments are not allocated as efficiently as possible and that students are not always choosing college instructional programs that are most likely to lead to positive earnings outcomes after graduation.

College majors that are highly occupation-specific, such as Registered Nursing or Electrical Engineering, are easy to evaluate by simply researching the occupation that those programs prepare graduates for. Others like English Literature or Anthropology don’t have such a direct correlation to specific occupations, so what graduates do after graduation is more of variable.

One way to review instructional program outcomes is by wages and the number of graduates of the program. To that end, each dot in Figure 1 represents a college major, with the vertical axis showing the median wage earned by graduates in their third year after completion, and the horizontal axis providing the number of graduates in the graduating class (in this case, the class of 2016). The programs with the highest earning graduates are at the top of the chart, and the programs with the largest number of students are on the right side.

The dots in the shaded area represent programs that have graduates whose median wages were less than typical for the award level. For instance, college graduates across all bachelor’s degree programs earned a median wage of $23.23 three years after graduation. However, depending on the program, the median wages earned by graduates could be substantially more or less than what was “typical” of bachelor’s degree graduates.

The Figure 1 dashboard allows for easy identification of outliers like Registered Nursing in the top right, which is a very popular program (2,371 graduates) that also provides graduates with excellent wages ($39.28). In the bottom right, the General Psychology and General Biology programs both are very popular with over 1,500 graduates each, but have relatively low wage potential for graduates, at $18.47 and $18.58 respectively, significantly lower than the majority of their peers. While these graduates will likely find wage growth in the future, their immediate lack of earning potential might make it difficult to support themselves and pay back student loans.

Adulting

Beyond meeting the demand of employers, labor market outcomes become very real to students after graduation. The immediate financial benefit of a college degree can be examined by comparing the median annual wage of recent graduates and subtracting typical student loan payments and the cost of living in Minnesota for a single person ($31,392). It should be noted that the basic cost of living does not include saving for emergencies or retirement, nor does it include entertainment expenses or a home mortgage (housing cost is for a single bedroom apartment).

Figure 2 illustrates net wages for 2016 college graduates by their second year after graduation. The majority of programs produce graduates who likely earn enough to cover the basic cost to live, but programs near or in the shaded area merit a more in-depth look. It may come as a surprise for new graduates and prospective students that these programs are unlikely to provide skills for jobs that pay living wages in the first years after graduation. To help ensure a college education results in employment that pays living wages, students who haven’t made a career choice might want to explore the small programs with very high wages that are located in the top left of the chart, which may have less competition for these high-paying jobs.

If students are not adequately informed about the consequences of their instructional program choices and outcomes based on the experience of past graduates from those programs, they may make decisions that have a negative impact on their employment and economic stability throughout their lives. Future wage growth is not consistent across programs and the need to invest more time and money to secure a living wage even after completion of a four-year degree might not be what graduates were expecting. 

It is also important to note that in some cases, graduates with an associate’s or bachelor’s degree will go on to complete a higher award level. For example, some graduates who earned a bachelor’s degree in Biology might pursue an advanced degree in Medicine or Pharmacy. In those cases, the full return of on the education investment will be reflected only after completion of the higher award, and may then meet cost of living needs.

Allocation Implications

Using wages as a proxy for employability and/or demand for specific skills, higher education institutions and policy makers can leverage these data to review how efficiently postsecondary education resources are aligned with labor market demand. The data also highlight the importance of taking into account students’ earnings outcomes by instructional program when making curriculum decisions. More educational funding is naturally channeled toward programs that instruct large numbers of students so there is risk for popular yet under-performing programs to be over-funded, while less popular programs with exceptional employment outcomes and high demand from employers could be under-funded and under-promoted.

Educational institution leaders and policymakers can use data referenced in this article - highlighted in the Educational Outcomes by Instructional Program and Award Level dashboards and detailed in the Graduate Employment Outcomes tool - when making decisions about allocation of funding by programs. Understandably there are multiple factors involved in such decisions, but earning outcomes as an indicator of labor market demand is a key consideration.

Certainly each college student has different goals, and getting a good paying job isn’t always the most important consideration. Students should pick majors that they are interested in and are likely to be good at. However, every student can benefit from knowing more about what they will get for their investment of time and money. And educational institutions and policy makers can benefit from new ways to explore whether educational resources are allocated in ways that promote graduates’ prosperity after graduation.

Education Program Outcome Dashboards

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