What Early-Career Earnings and Unemployment Rates Tell Us About the Returns on Bachelor’s Degree Majors

The four quadrants reveal the following patterns:

Low unemployment, high earnings. In this category, the most commonly held majors among early-career workers are nursing, general business, marketing and marketing research, finance, and accounting. Engineering majors are also well-represented in this category, accounting for approximately 25 percent of early-career workers who hold a major in this quadrant. While lucrative, some of these majors can require professional licensure for the maximum payoff. For instance, accountants typically need a Certified Public Accountant license to carry out more specialized tasks, and nurses must be licensed within their state in order to practice.

Low unemployment, low earnings. Business management and administration, criminal justice and fire protection, and physical fitness, parks, recreation, and leisure are among the most commonly held majors in this quadrant. However, this quadrant also contains a variety of education-related majors, such as elementary or general education. Teachers are notoriously underpaid, although salaries can vary by state, district, and teacher experience.

High unemployment, low earnings. Commonly held majors in this quadrant include psychology, biology, communications and mass media, and political science, along with many arts and humanities majors. The reasons these majors face above-median unemployment rates vary. Psychology majors, for example, typically need an advanced degree to practice as a psychologist. Graduates in the arts—who face the highest unemployment rates overall—are more likely to be self-employed or take a bit longer to find their niche than graduates of other majors.

High unemployment, high earnings. Computer science and economics are the most commonly held majors within this quadrant. The occupations aligned with these majors, while lucrative, have faced some tough headwinds recently. Early-career workers who majored in computer science faced an unemployment rate of 7.2 percent in 2021–23, up from 4.3 percent in 2013–15. Enrollments in computer science programs grew rapidly over the past decade—as did employer demand and starting salaries. But after the pandemic, tech companies began pulling back on hiring, reducing opportunity for new graduates. The emergence of artificial intelligence (AI) may be further narrowing opportunities. Recent evidence suggests that enrollments in computer science programs are declining as students take note of the shift in labor-market incentives—and some are choosing to major in AI instead.

Conclusion

Early-career earnings and unemployment rates provide important—albeit incomplete—signals about the labor-market returns associated with different bachelor’s degree majors for newly-minted graduates. Earnings typically improve with time, and once graduates are settled in their careers, their employment becomes much more stable. However, the early difference in earnings potential associated with different majors tends to compound over time, resulting in vastly different levels of financial security and wealth-building potential. Students might also need a graduate degree to maximize the earnings potential of their undergraduate degree.

For students, the key takeaway is that earnings and employment data should help guide their decisions, in combination with their personal interests and abilities. At the same time, students should be aware that employer demand for specific majors can change rapidly, as the case of computer science majors illustrates. Ultimately, early-career earnings and employment outcomes are two important considerations among many—critical to student decision-making, but part of a much larger puzzle.