Content uploaded by Tatiana Chambrasi
Author content
All content in this area was uploaded by Tatiana Chambrasi on Feb 06, 2020
Content may be subject to copyright.
JOB SECURITY IN CORRELATION WITH MAJORS AND DEGREES
Tatiana Chambrasi
California State Polytechnic University, Pomona
Abstract
Key Words
Data Collection, Data Estimation, Quantitative Methods, Computer Program, College majors,
Job Security, Degrees, Digest, Regression analysis
JEL Classification Codes
C880
College students pursing a bachelor degree are always forced to make a hard decision
when it comes to what to major in. Not only is it a really hard decision, students want to
feel secure about their choice. Through out this paper experts discuss how job security
impacts enrollment of majors and it presents their results on whether there is a correlation
or not. It comes to the conclusion of others that in some way or another there is a
relationship between majors and job security. Based on data collected in Digest from the
years 2010, 2012 and 2016 we conduct a regression analysis. We come to the conclusion
that there is a slight correlation between majors and job security.
Table of Contents
Introduction 2
Literature Review 3
Data Analysis/Theory 10
Conclusion 13
1
Introduction
With students always pursing a degree whether it be a PhD or just simply a high school
diploma, the one question that always comes into play is what can I do with this degree and is
what I am choosing the right direction. There are so many jobs out there in the world but how
secure are these jobs for people and what do they have to have or are they even able to apply for
these jobs. Finding a job that isn’t temporary has become harder and harder throughout time. To
be able to have a stable job with security comes with a lot of time and effort to be able to reach it.
Degrees and majors have a big part to play in when trying to find a job that isn’t temporary. In
this research paper, I will show how choosing a certain major can obtain the job security people
want. But not only choosing a major can get you the security but also what type of degree one
receives in that field. I will do this by showing other experts who have written and discussed
about this topic. Also I will be gathering data and running a regression analysis to see whether
job security does correlate with majors.
Throughout my paper I will focus on data I have found and other experts who have
written about papers related to this topic who focus on job security within students. I will also
mention in my paper later on opinions from other experts on whether they believe there is a
correlation with majors and having job security. I have chosen this topic because as a current
student going through the process of graduating I can say job security is one of the main things
on my mind. Many students today struggle in choosing what to in major because of this very
issue of finishing school with no security of having a job. This topic is important because as the
job market getting better students are having more incentive to get the degree needed to be able
to find a job but the important part is the area chosen to get this degree. To have job security
doesn’t just mean finding a job, it means having the security of not loosing a job with well-off
pay. Therefore, choosing the right area to study in is key to having that long-term security one
would want when it comes to a job.
There are many other factors that play into job security other than choosing what field to
study. Many people forget that just choosing what school to go to after graduating high school
isn’t just enough. People are starting to realize that choosing what area to study has a very big
impact on finding a job in the long run. To have job security requires much more than the area
you study in or a simple degree. Some of the experts which I will discuss later in my paper talk
2
about how studying in certain area isn’t enough anymore for job security. Employers expect
much more from people who are applying for certain jobs. Students today are choosing majors
that have higher job security over majors which they would prefer because they have gained this
knowledge about how there is a correlation that comes with majors and jobs.
The correlation between majors and job security has risen as time has passed. Students
are beginning to realize where there is job security and have switched over majors. These certain
majors not only come with job security but also depending on how high ones a degree is can
bring even more security for a certain job. In my paper I will discuss two majors Economics and
Mechanical Engineer, how these two majors have job security but also the higher your degree is
the more security you will have in that job. The next section will introduce various experts and
their research on the relationship with majors and job security. It will also mention other data
collected by these experts to show the correlation between the two.
Literature Review
I stated in my research paper topic that experts have reported on a topic related to this and
have stated their view’s on whether there is a correlation with majors and job securities. In my
hypothesis I stated that there is a correlation with majors and job securities but also degrees have
some role in finding job security. As I did my research the more I found out that choosing what
major to do study in plays a part in having job security. People are more concerned of what
schools they get into than actually choosing what area of field to study in when it should be the
other way around today. The experts I will be talking about consist of economists, professors and
other scholars who have looked into this topic. Their work is more in depth analysis about how
majors and degrees correlate with jobs.
The first paper I would like to discuss is written by Alexander I. Ruder who is a senior
adviser in the Community and Economic Development group at Federal Reserve Bank of Atlanta
and Michelle Van Noy who is the Associate Director of Education and Employment Research
Center at State University of New Jersey which is titled “Job Security and the Informed Major
Choice of U.S University Students” which focuses on the students in the public university
system who are majoring in certain fields and whether they believe there is job security with
those majors. They both looked into students to see if their decision on majoring in a certain area
was affected with future careers. They found out that students do take into count if there is job
3
security when it comes to majoring in certain area. Making a decision like choosing what major
to study is a complex decision, about 48% college students that have graduated would have gone
back and been more cautious of choosing what to major or even choose something completely
different (Godofsky et al. 2011; Stone et al. 2012). Students don’t take choosing a major
seriously enough which is why when they look back at it they would have done things
differently. In this paper it was stated that individuals have access to outcomes of data of past
graduates and they use this information to choose colleges or majors that are more economically
better for themselves. I believe because students have access to a huge amount information about
what one should choose to study it affects their decision. If on the other hand they didn’t have
access to this information would they choose differently. They believed students choose majors
based on information that is provided to them about these majors like how much one gets paid or
how many jobs are available in a specific area of study.
Other experts like Terry J. Fitzgerald, Phil Davies, and Wonhoo Chung from Federal
Reserve Bank of Minneapolis wrote an article called “Degree of Job Security” which talks about
how a good education is a better security blanket than having a hefty paycheck. They talk about
how economic analyses have shown that there is an uneven field when it comes to economic
hardship like age, education or race. They’ve found that research has shown that less education
leads to less job security. They’ve also found a many studies that emphasize that more education
takes you down the path towards higher job security which isn’t only during recessions. This is
one of the reasons I believe job security does have correlation with majors because you can’t
predict when times are going to go into recession. It is always better to be safe so at times like
that you don’t have to worry about whether one’s job is in jeopardy or not. They found studies
that showed September 2010 the U. S rate for college educated people who are over 25 was 4.4
percent which is less than half for people who haven’t finished college. When economy started to
go down people who had bachelor degree fell less than 1 percent where on the other hand people
who only had high school diploma fell 5.6 percent. They found out that in the labor markets,
wages and education are all correlated but isn’t always necessarily tied up together. I do agree
with them that education and jobs aren’t one in one but they do relate to one another. Their
analysis showed education is important key when it comes to jobs and job loss. What they
discovered is that students that choose field of study does correlate with occupational choice
which when it comes to downturns certain occupations suffer more from job less than others do.
4
They include a report from Census Bureau’s Current Population Survey which shows
individuals status of employment, hours one has worked and how much they earn. This is how
they calculate average hourly wage each person gets over 25. They took this and created 5
quintiles which specify 5 wages for that year going from lowest to highest. They computed the
unemployment rate for each group by figuring out how many people were jobless as of March
the next year. Chart 1 represents unemployment taken apart by wage in March 2007 before the
last recession. It shows that unemployment rates of younger, less educated and minority workers
which have low-wage employees are at most risk of job loss even during economic expansion.
The workers in the bottom of the wage distribution which is the lowest have the highest
unemployment compared to the workers in the highest wage quintile. This shows how it doesn’t
matter much on whether something pays well or not because it usually comes back to one’s
education.
When the economy started to go into a recession the unemployment rate changed substantially
across all quintiles. As you can see the when the recession hit the lowest quintiles were effected
the most who were low-educated workers. Where on the other hand the highest quintile who
were workers who had high education were not affected as much. When the economy goes into a
recession its hard to predict what is going to happen in the moment but knowing you are slightly
safer because of ones major or education can go a long way during times like this.
5
https://www.minneapolisfed.org/publications/the-region/degrees-of-job-security
What they concluded from this is that there is a strong relationship when it comes to
education and securing a job to avoid unemployment. The more people that get educated the less
there will be job loss. Education is a key factor when it comes to keep one’s job and whether a
recession will affect them more or less. This is another thing I agree with the authors that not
only choosing a major just overall education is important when it comes to job security. The
more in depth you look into it the more secure it gets depending on what area you are looking
into. They go on to talk about how education is broken down into how high one choose to earn a
degree in that area of study. They discuss how some areas of jobs don’t require a degree but
when it comes down to it these jobs are at more risk than others because of the uncertainty and
lack of security one gets without needing a degree. They discuss a little about degrees and how
of course not all jobs require one but the benefiting of having a degree out weights not having a
degree. Overall the take away is if one wants to have job security they should be well educated.
It might not seem like that at first but in the long run to have the security one wants, education is
what is going to get you there.
6
Other experts, professor James A. Freeman and Barry T. Hirsh from Wheaton college and
Trinity University wrote a paper on “College Majors and the Knowledge Content of Jobs” which
talks about how students seek majors that they expect have some benefit form the labor market.
They discuss how students choose majors based on knowledge they collect through information
nationwide. They collected data on national degree by year and what area on choose to study,
there are surveys of individual workers and their wages through a certain period, and also
detailed job description. They used different types of sources to gather all their data needed to
show the correlation with majors and jobs. One of their sources is Digest of Education Statistics
which they used for collecting the degree data. Later on in my paper I will also use Digest of
Education Statistics to collect my own data and run a regression analysis. Another is
Occupational Information Network which shows detailed information about certain jobs and
what is needed for that job. They used these sources to collect their data to later analyze the
relationship with knowledge one has toward their major. They used a regression analysis to
conduct their research and found out whether there is an actual relationship to establish between
majors and knowledge of jobs. They came to the conclusion yes there is a relationship between
the two choices. When one gains knowledge about a job it will affect their choice in major this is
something that is bound to happen. The more important having security in a job gets the more
majors will I believe correlate with job security. They go more into detail breaking it down to
levels of degrees but even then there is still an obvious relationship between the two. There is a
shift in majors when one obtains knowledge of a job and its benefits one can have. When people
know there is security in certain areas of study people begin to shift ways towards those areas.
These effects according to James A. Freeman and Barry T. Hirsh is that they appear to be strong.
Table 3 shows their regression analysis results with the R squared for each knowledge content
area. Their R squared results shows how much the data fits in with one another. When you look
at Table 3 you notice their results are generally all close to 1 which means that the data fits in
pretty close together. They divide into majors and took the data they collected if students know
about security in one’s field. They show variables lnC which represents the jobs weight from the
data they got from Occupational Information Network (O*NET) with a lag of four years. The
variable R represents the return of the data from O*NET with a lag four years. Something I
noticed is that when James A. Freeman and Barry T. Hirsch did their regression analysis they
used lags which adjusts the actual time series they are using.
7
This shows how most majors and the knowledge of one’s major has a significant
relationship with one another. A lot of these majors are significant when it comes to one knowing
the security a job has. I will also be doing a simpler regression analysis later in my paper that has
to do with earnings and enrollment. James A. Freeman and Barry T. Hirsh had a much more
complex regression which they counted in errors and other variables. At the end they came to an
understanding that majors and knowing the security of a job does coincide with one another.
8
http://ftp.iza.org/dp2941.pdf
One of the experts I came across was Russ White from Public Media from
Michigan State University who talks to Phil Gardner about the job market and what jobs are
looking for. Phil Gardner mentions how the job market currently is looking up for
undergraduates. They talk about how employers are concerned now to find qualified employees
who have the proper skills for the job. They say how employers are worried about how all these
undergraduates are available but don’t necessarily have the skills that are needed for certain jobs.
Depending on the area of field a student chooses to study some require on hand on experiences
which a degree might not get you while on the other hand a degree will get you far in other areas.
Certain majors require skills and tools needed for job security which one might not get from just
a degree is what Phil Gardner and Russ White are trying to say. Jobs today are much more than
just knowledge; the employers are content with the knowledge in the field but are uncertain of if
people are actually cable of doing the task at hand. This is an issue currently with students
pursing a degree that not only are they worried if they are in the right field but whether they
degree is going to be enough at the end. People may choose a major that requires skills outside of
school but the first step is choosing the right area to study in to get oneself going in the right
direction for job security. Russ White and Phil Gardner refer to these skills as “boundary
spanning skills” which involve time spent outside of school that normally students don’t have
time to do. They believe students need these skills in order to develop and gain experiences.
Phil Gardner suggest that students once they enter their first year of college to treat it
like as if you are preparing for your career right at that moment. Gardner truly believes students
need to start thinking of their career path early, that a degree is not going to cut it anymore. I do
agree with Phil Gardner that people need to start looking at school as if they are shaping their
career path which many don’t. Many students finish school with a degree in a field which they
have no experience in and question why its so hard to get a job. Which is why it might be true
that a degree isn’t going to be enough anymore for establishing yourself. Its believed that
students need to start understanding that doing just school and earning a degree is not going to be
it anymore. This does make sense in today’s job market that a lot of students coming fresh out of
school don’t have much skills to apply to the job. However, this all depends on what area
students chooses to major in because some areas of study require some type of degree or license
even to be able to get involved. Even if jobs are going to start looking for skills over education it
still comes down to picking the right area to major in to be able to apply your knowledge towards
9
those skills to gain job security. Overall they do point out that job market for college graduates
does depend on what area one studies because some require more skills than others. They just
what to point out that students should start thinking of gaining experience once they start
freshmen year to be able to have that full job security one would want after they graduate
college.
So overall its been pretty straightforward that most experts who have done research in
this area or have even discussed other factors related to this area do agree there is some type of
correlation when it comes to job security and majors. When it comes down to it knowing if some
areas have more job security than others its bound to make people shift towards those areas.
Although there are experts out their like Russ White and Phil Gardner who do believe there is
much more to job security than just picking a major and getting a degree, Michelle Van Noy and
Alexander I. Ruder state that because students have access to the knowledge of knowing whether
there is job security in certain field that alters what students choose for their major. These
students need to start somewhere to be able to head in the right direction to establish job security
Michelle Van Noy and Alexander I. Ruder believe it starts with picking a major. Next in this
paper will go into data analysis of job security and major’s students pick by showing a regression
analysis.
Data Analysis/Theory
The analysis in this paper contains the earnings of certain majors and the enrollment of
people in those specific majors. I use earnings as a measure for job security in my analysis which
is the independent variable on the other hand enrollment is my dependent variable. I will also
discuss two majors Economics and Mechanical Engineer, how these two compare when it comes
to job security.
The earnings data is from Digest of Education Statistics, published annually by the
National Center for Education Statistics (NCES). Digest of Education Statistics allows people
access to data of employment outcomes of bachelor degree recipients of certain years. For my
data I used the years 2010, 2012 and 2016 for the earnings and enrollment variables. I also used
Digest to gather my data for enrollment in certain majors. My data is broken down into the years,
the field of study, earnings and enrollment. As you can see in Table 4 it shows all the data I have
gathered into columns.
10
Table 4: Earnings and Enrollment of Bachelor Degree recipients among the age of 25-to-29 in
fields of majors for the years of 2010, 2012 and 2016
Year Field Earnings Enrollment
2010 Engineering 60100.00 72657
2010 Computers 56320.00 39593
2010 Business 47160.00 358119
2010 Nursings 53350.00 129623
2010 Economics 52380.00 17278
2010 Math 50120.00 16029
2010 Biology 43300.00 86391
2010 Physicalscience 42210.00 23381
2010 Communications 40260.00 81280
2010 English 38100.00 53229
2010 Criminaljustice 39300.00 43613
2010 Psychology 37240.00 97215
2010 Liberalarts 41060.00 46963
2010 Fitnessstudies 40250.00 33332
2010 SocialWork 35020.00 25421
2012 Engineering 59830.00 81371
2012 Computers 58330.00 43066
2012 Business 54940.00 367235
2012 Nursings 50830.00 163675
2012 Economics 54250.00 178534
2012 Math 48180.00 18841
2012 Biology 42530.00 95850
2012 Physicalscience 45030.00 26664
2012 Communications 40180.00 83771
2012 English 39510.00 53765
2012 Criminaljustice 39140.00 54091
2012 Psychology 38350.00 109099
2012 Liberalarts 35280.00 46961
2012 Fitnessstudies 40380.00 38998
2012 SocialWork 34240.00 29695
2016 Engineering 65480.00 106850
2016 Computers 65440.00 64405
2016 Business 50290.00 371694
2016 Nursings 56350.00 228896
11
2016 Economics 60350.00 161230
2016 Math 50340.00 22777
2016 Biology 45330.00 113749
2016 Physicalscience 49110.00 30477
2016 Communications 45260.00 92554
2016 English 40280.00 42795
2016 Criminaljustice 40990.00 61157
2016 Psychology 40100.00 117440
2016 Liberalarts 40020.00 43661
2016 Fitnessstudies 40080.00 50918
2016 SocialWork 36200.00 34432
As you can see as the years go on earnings generally increase as do the enrollment in majors.
There certain majors like Liberal Arts where for some reasons unknown earnings decrease from
2010 to 2012 but enrollment increased. However, looking at the bigger picture generally as time
went on earnings increased as so did enrollment. As you can see when earnings go up the people
enrolled in the major go up as well which means there is some correlation between the two
variables. I am sure their other factors/variables do play a role in enrollment however for this
research paper we are only looking at earnings and enrollment. Now I will go into explaining my
regression analysis.
As you can see in Table 4 I have collected my data in an excel sheet and ran a regression
analysis on that data. Table 5 shows all the results I received from that regression.
Table 5: Regression Analysis Results
12
When looking at the results we focus on our R squared and our p value. Our R squared is going
to explain to us one factors relationship to another factors. The p value is going to explain the
significance of earnings to enrollment. For this regression we use a significance level of 0.05
which means we want our p value to be less than 0.05 for it to be significant. For our R squared
the closer it is to 1 the more the data fits. For my results if you look at Table 5 you can see we got
an R squared of 0.110420004 which means that the data fits the model about 10%. The reason
for our R squared to be this low is because there are other factors that fit the data but are more
difficult to measure like interests for example. Now we focus mainly on our p-value if you look
at the p-value on Table 5 we have 0.0257361 which is less than 0.05. Since our p-value is less
than 0.05 that means Earnings does play a significance when it comes to Enrollment. I also
calculated the correlation between Earnings and Enrollment which was 0.332295055. For there
to be a medium correlation you would like your results to be between .2 to .5. The correlation
between Earnings and Enrollment we get is .3 which states that there is a medium correlation
between the two variables. When there is a positive correlation it means as one variable goes up
so does the other. In conclusion our results show that as Earnings increase in specific areas of
majors by $10,000 the Enrollment increases by 34,000 people.
Now let’s take a look at the two majors Economics and Mechanical Engineer. I went on
to Bureau of Labor Statistics and found out some information about each of these majors. For
Economics the typical entry level education needed is a master’s degree however for a
Mechanical Engineer the typical entry level education is bachelor degree. Typically, as an
Economics major with a master’s degree you get payed a little more than a Mechanical Engineer
who has a bachelor degree. This was something that was interesting to me that Economics with a
master’s degree earns more than a Mechanical Engineer with a bachelor degree. I knew there
was going to be a little bit of difference but I wasn’t expecting there to be a wage difference
between the two. When you look at the overall picture Mechanical Engineers might have job
security right out of undergraduate school however in the long run people who major in
Economics because a master’s degree is required for entry level education they will have much
more job security in the long run. My take away from this is majoring in an area that has job
security also what matters is when it comes to one’s degree. However, to even start looking at job
security one needs to pick the right field to receive that job security.
13
Conclusion
Going back to the question that “Is there a correlation when it comes to job security and
majors” yes there is but there are so many other factors that play into students choosing a major.
Looking back at other experts and what they believe is students knowing about job security and
having knowledge of specific major does affect their decision making. Job security is something
that will always be of concern when it comes to students earing a degree and choosing what area
to go into. After doing my research I noticed that job security is measured in two ways one being
how much one can make and another is how many openings are in the area of field. These are
factors that correlate when it comes to students choosing what to major in or if they need to go
further than a bachelor degree to gain job security. I did mention a little about degree doesn’t
mean much anymore its what skills one can bring to the job that matter. Employers might be
looking for skills but as I researched more about this people with degrees still get payed more
depending on that. If you look back at Economics and Mechanical Engineer those are just two
majors, I compared but I am sure there is more out there that go through the same thing dealing
with job security and degrees. So it might be true skills are starting to out weigh education but its
that education that will set you in the right direction for those skills to achieve.
In conclusion my data did show that there is a slight correlation when it comes to job
security and majors however, there are many other factors that also play into enrollment which
are sometimes harder to measure. For example, people’s interests in life or the fact that one’s
family would like them to purse a certain field. I am sure if you could factor these other variables
they would also have some significance when it comes to enrollment of majors. As time goes on
the correlation will change as other factors come into play but when it comes down to it, it all
starts with where one chooses what to major in and to be able to gain all the knowledge they
need for that job security they desire.
References
14
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook,
Economists, on the Internet at
https://www.bls.gov/ooh/life-physical-and-social-science/economists.htm 15. Nov. 2018.
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook,
Mechanical Engineers, on the Internet at
https://www.bls.gov/ooh/architecture-and-engineering/mechanical-engineers.htm 15.
Nov. 2018.
Chung, Wonho, Phil Davies, and Terry J. Fitzgerald. “Degrees of job security.” Federal
Reserve Bank of Minneapolis Region (2010): 4-13.
Digest of Education. “Employment Outcomes of Bachelor’s Degree Recipients”. The Condition
of Education 2018. Web. 12. Nov. 2018.
https://nces.ed.gov/programs/coe/pdf/coe_sbc.pdf
Digest of Education. “Employment Outcomes of Bachelor’s Degree Recipients”. The Condition
of Education 2016. Web. 12. Nov. 2018.
https://nces.ed.gov/programs/coe/pdf/Indicator_SBC/coe_sbc_2015_11.pdf
Freeman, James A. and Barry T. Hirsch. “College majors and the knowledge content of
jobs.” Economics of Education Review 27.5 (2008): 517-535
Ruder, Alexander I and Michelle Van Noy. “Job Security and the informed Major Choice
of US University Students.” (2017).
White, Russ. “Job Market for College Graduates Remains Strong”. Public Media from Michigan
State University. Radio. 22. Oct. 2018.
U.S. Department of Education, National Center for Education Statistics. (1970-71 through 2015-
16). Digest of Education Statistics. T.D. Snyder, Production Manager, & C.M.
Hoffman. Washington, DC.
15
U.S Department of Education, National Center of Education Statistics (2010 and 2016). Digest
of
Education of Statistics. T.D. Snyder, Production Manager, & C.M.
Hoffman. Washington, DC.
16