All posts by Jonah Sinick

Economics majors and earnings: further exploration

In Earnings of economics majors: general considerations I presented data showing that economics majors make substantially more money (20%-50%+) than majors in other liberal arts. I gave five hypotheses, each of which could partially account for the wage gap. These are possible differences between the majors in:

  1. Human capital acquisition.
  2. Acquisition of a desire to make money.
  3. Pre-existing ability as measured by tests.
  4. Pre-existing desire to make money.
  5. Signaling.

I discussed a priori reasons for believing that they might be significant, and how one might go about testing the hypotheses and the extent to which they explain the wage gap.

Having examined available data, I believe that with the possible exception of #3, based on publicly available information, there’s a huge amount of uncertainty as to the roles of these factors in explaining the wage gap. In many cases there is data suggesting the presence of effects, but the data is not robust and the sizes of the effects are entirely unclear. Furthermore, the hypotheses are not exhaustive: other factors (such as those mentioned at the very end of this post) plausibly play a role, making it difficult to reason in the fashion “factors A, B and C play very small roles, therefore factor D must play a large role.”

I was originally hoping that there would be a simple, clearcut case for or against majoring in economics increasing earnings (relative to other liberal arts), but resolving the question would seem to be a major research project. Still, I hope that this post can help students who are contemplating majoring in economics or another liberal art get a feel for the “lay of the land,” and some of the points therein may be actionable for particular individuals.

I’ll address each hypothesis in turn.

This post is very long. If you’re short on time or attention, consider scanning over the subtopic headings and reading the sections that look most interesting. As usual, I’d appreciate any relevant thoughts, particularly if you’re a former economics major.

#1 Human capital acquisition

  • I was unable to find systematic research on the role of human capital acquisition in economics majors’ greater earning power, and the available data is not robust.
  • There are major biases that make it difficult to infer the role of human capital acquisition in economics majors’ higher earning power from what people say.
  • It seems relatively uncommon for people to argue that object level knowledge of economics is useful on the job.
  • Many sources argue that economics majors indirectly learn skills such as analytical thinking and quantitative literacy that help on the job.
  • There may be considerable heterogeneity with respect to how useful particular courses for the economics major are, and how useful they are for a given career, across courses and careers. Estimating the magnitude of human capital acquisition from majoring in economics would require (i) subject matter knowledge of the individual courses (ii) knowledge of how common it is for an economics major to take each of these courses and (iii) how former economics majors are distributed across jobs.

Biases affecting reports of the usefulness of economics on the job

People’s opinions vary concerning how useful knowledge of economics is on the job. It’s difficult to assess the veracity of their views:

  • Representatives of economics departments are motivated to portray economics as more useful than it is.
  • When people make a decision, they often want to believe that they made the right decision, and will come up with rationalizations for why their decisions were right. Psychologist Robert Cialdini’s discusses this in his book Influence: The Psychology of Persuasion. Thus, former economics majors may be motivated to believe that what they learned in majoring in economics is useful on the job, and so exaggerate the usefulness of majoring in economics. In the other direction, those who didn’t major in economics may be motivated to believe that economics doesn’t teach employable skills.
  • People who major in economics may unknowingly pick up analytical / critical thinking skills that are superficially unrelated to their coursework, that prove useful on the job.
  • Those who major in economics often don’t have knowledge of what skills they would have picked up on had they majored in a different subject, and so may not be able to make a good comparison.
  • Some of those who express views on the subject may not know much about economics coursework. For example, employers who don’t know economics may notice that economics majors are better employees and misattribute this to what they learned in their economics classes, when it’s actually due to other factors.
  • It’s unclear how representative those who speak up on the subject are: people who have found economics useful on the job may be more or less likely to report on this than those who don’t.

Quotations from current economics majors

Some quotations from a message board thread on College Confidential. Note that at least two of the commenters hadn’t yet graduated from college at the time when they wrote.

From VMadden

Econ teaches you a lot of math which is very useful for careers in finance or accounting. The problem is that most of the later econ courses are highly theoretical and, therefore, not very appropriate to real life.

From onhcetum

It’s a bunch of theoretical ********. I am about four classes away from graduating, and I still haven’t learned crap. I know the basics of supply and demand and the relationship between the unemployment rate and inflation and GDP, but not a whole else.

From econoboy

Economics is an interesting field of study (like most social sciences) but it’s also (like most social sciences) not marketable and very academic in nature. Economics makes many simplifying assumptions about human behavior that in reality makes it very unrealistic. I’m getting ready to graduate college feeling like I have learned a lot and had a good well-rounded education but I’m also sitting here thinking to myself – “What am I going to do for a career?” I just put in 4 years of school and I honestly don’t feel much more marketable than a high school graduate.

Quotations from former economics majors

I had difficulty finding relevant quotations from former economics majors, who are the ones who would be best equipped to make an assessment.

Found on the thread Why you should major in Economics at College Confidential:

”Pooja Jotwani, a recent graduate of Georgetown University in Washington D.C., […] says the major strengthened her business skills and provided her with something very simple: “financial security.””


”I work at the corporate headquarters of Mervyn’s as a financial analyst and internal auditor. None of my work relates to the material I studied as an undergrad, but that does not imply that my economics degree provides little value. As I have found from my own recruiting experience, an economics degree enjoys a great deal of respect because of exposure to issues related to the economy and thus business, as well as the analytical thinking that underlies economics.”


”I am now in Law School at Harvard. Nowadays, an Economics degree is one of the most helpful degrees to have for an entering law student. In my experience, it is the only academic non-legal subject that every substantive introductory law class teaches; every class thereafter assumes one has an understanding of economics.


Well considering that I’m currently a Marketing intern for a video game company… and am working on marketing campaigns for a THQ game and several MMOs, I would say the Econ major on my resume didn’t hold me back from it. Also, the other marketing intern here is an Econ major from another school. Not going to say it helps for marketing, but it doesn’t hurt.”

Quotations from college economics departments

A few representative statements below. These sources are obviously biased.

University of Houston

Your economics training provides you with a terrific set of job skills, and in fact the economics major provides you with virtually all of the top ten most important job skills […] the graphs in economics represent quantitative concepts, and as an economics major you will certainly have no fear of graphs. Further, many classes use explicit numerical problem solving. You also have the opportunity to explicitly learn a wide range of statistical and computing tools […] There is no better major for learning analytical problem solving than economics. […] All of business is problem solving, and this is the expertise you have learned from the logical constructs in economics

George Mason University

When you graduate with an economics degree, you will have a good understanding of the national economy and will be able to think critically about problems in the business world. You will also have good communication skills and skills in manipulating data and using computer technology. Thus you will be prepared for many careers. […] Economics majors compete very well against most business majors for jobs in the business world. Many large corporations value the broad analytical training received by economics majors.

Smith College

Individuals with training in economics are well prepared for a variety of careers. In most cases, the rigor and precision of technical training in economics will give the graduate a competitive advantage.

Quotations from economists

As I mentioned in my original post, economist Bryan Caplan wrote:

In my experience, undergraduate econ majors learn only two skills they’re likely to use in any job outside the Ivory Tower: (a) how to calculate a present discounted value, and (b) basic statistics. Except in top schools, I doubt most econ majors master either (a) or (b). The remainder of the economics curriculum simply isn’t vocational.

Economist Greg Mankiw seems to think that majoring in economics increases earnings based on his blog post Why Major in Economics?. He doesn’t give a causal pathway, but could think that a causal pathway is human capital acquisition (or signaling).

What employers say

Surveys of employers are focused around how desirable they find economics majors, and most of the ones that I’ve found don’t separate out the extent to which economics majors are considered desirable because of what they learn in their economics major. But to the extent that employers want economics majors, it may be because of human capital acquisition, so employers wanting economics majors is evidence that employers think that economics majors acquire more human capital than usual, which is in turn (inconclusive) evidence that economics majors do in fact acquire more human capital than usual. For information on how desirable employers find economics majors, see the section of this post labelled “#5 Signaling”.

The report Economics Graduates’ Skills and Employability has some information on how employers who are hiring students for roles that utilize economics specifically feel about how well prepared their starting employees are.

The starting salary vs. midcareer salary test

In my earlier post, I suggested that by comparing the percent by which starting salary grows over the course of a career for economics majors vs. other majors, one can obtain evidence for or against majoring in economics increasing human capital (relative to other majors). Specifically, I said that an increase in human capital should become less significant in relative terms over time (e.g. because the amount of human capital that one gains on the job over a course of a career should dominate what one gains in college), so that if majoring in economics increased human capital, one would expect the percentage growth for economics majors to be lower than those of other majors.

Payscale’s 2008 report gives the percentage increase from starting salary to midcareer salary by major:

Philosophy 103.5
Economics 96.8
PoliSci 91.7
History 81.1
English 70.3
Psychology 68.2
Sociology 59.5

By the logic of my earlier post, the fact that the figure for economics is higher than that of most liberal arts would seem to be evidence that economics builds less human capital than the other majors do.

There’s a confounding factor: economics majors have higher starting salaries, and in general, outside of technical professions such as engineering, people with higher starting salaries may experience higher percentage growth. (For an example supporting this intuition, my impression is that there are elite finance firms where earnings go up by 300% over the course of their careers, even after taking into account people being laid off.)

To try to control for this factor, one could compare percentage growth by major with percentage growth figures for alumni of colleges with the same average starting salary as the major. The percentage growths for colleges with a fixed starting salary are highly variable, so employing this strategy would require detailed analysis. A cursory look at the data hints to me that the general effect of higher starting salary on percent increase of earnings is not high enough to fully account for economics majors having such a high percent increase relative to other majors. But since I haven’t done a systematic analysis, I have low confidence in this.

So the fact that economics majors’ salaries increase by a much larger percentage than the other majors aside from philosophy would seem (very tentatively) to be evidence against the hypothesis that economics majors make more money because majoring in economics builds human capital.

#2 Acquisition of a desire to make money

Here too, there’s little data available.

Increased selfishness?

There are a number of psychology studies (see e.g. Does Studying Economics Breed Greed? and Are economists selfish? A lit review) that purport to associate studying economics with greed but:

  • In some cases there are explanations other than greed that could explain a difference between the populations. For example, one study finds that economists give less money to charity than other academics do, but this could reflect economists giving lower credence to charitable giving doing good (on account of being aware that it can distort the functionality of the market mechanism) rather than them being greedier.
  • Some of the findings are from artificial lab contexts that may be unrepresentative of the real world. For example, there are experiments in which economics students have defected more often than other students when playing prisoner’s dilemma, but Yezer, Goldfarb and Poppen have argued that this is unlikely to generalize to real world situations involving potential for cooperation.
  • As usual, there’s a potential issue of publication bias.
  • Publication bias and related issues are especially worrying in this context, because a lot of people have negative sentiments toward economists for a number of reasons: (i) people often disagree with economists’ political views as a class (ii) people are jealous of people who make more money than they do, and economics majors and economists make more money than others do (iii) those who are uncomfortable with quantitative subjects may be resentful that economists are facile with quantitative subjects (iv) economics involves harsh truths like the necessity of triage that many people find uncomfortable.

Also, many of the studies don’t distinguish between testing “studying economics causes greed” and testing “those who are greedy are more likely to study economics” (though a few do).

Subjective reports of the impact of majoring in economics on desire to make money

One would like subjective reports of how studying economics altered students’ desire to make money. My original post attracted some relevant comments at The Bill Fold, which I’ve pasted below. They are few, and may be unrepresentative.


I don’t think majoring in Econ made me more selfish


I was an economics major, and I definitely have a desire to earn a high income. It’s an interesting question, whether or not the econ major influenced that, since I definitely didn’t feel that way coming into college. For me, I think that what changed was a much more acute awareness of what a raw deal everyone except the very highest earners are getting in this economy. Some of that came from studying economics in the midst of the great recession, sure, but I think the bigger factor was just experiencing the effects of income inequality firsthand in a way that I hadn’t before.


I’m not convinced majoring in Econ increases selfishness so much as Econ majors (except those academia-bound) tend to be practical and focused on achieving at the very least a securely upper middle class lifestyle. [Looks around apt, looks outside at neighborhood, checks account balances] If it was supposed to make me more selfish, it didn’t exactly work, cause I’m not raking it in over here.


I would add that rather than increasing selfishness, a good Econ courseload should improve someone’s decision-making. You’ll wonder to yourself if you are being rational in your choices or maximizing your utility, which helps you decide what to do.


Econ major here who chose a career in government, so to answer Mike’s question, no! Though I probably did use my Econ background to fully assess the relative merits of good salary + pension + benefits/number of hours per workweek. 😉

Comparison of majors and nonmajors

As I said in my original post, one would like a comparison between majors of how desire for money evolves over the course of college. Such a study may exist, but I haven’t been able to find it. The results of such a study would not be decisive: social desirability bias plausibly leads survey respondents to report that money matters less to them than it actually does, and a difference between economics majors and other majors could reflect different degrees of social desirability bias rather than different degrees of desire to make money.

#3 Pre-existing ability as measured by tests

Here we have relatively good data. Economics majors score higher on standardized tests than other liberal arts majors do, and this can be expected to partially account for the wage gap, but the standardized test gap by itself isn’t large enough to explain the wage gap.

Average economic returns associated with higher SAT scores, and relative SAT scores of economics majors

Table A3 of Estimating the Return to College Selectivity Over the Career Using Administrative Earning Data seems to indicate that a 100 point increase in SAT score (on a scale of 1600) was, for the class of 1976, associated with a ~2% increase in income, and was, for the class of 1989, associated with a ~4% increase in income.

It’s been suggested that SAT math is what correlates with earnings rather than SAT verbal. If true, this would mean that a 50 point increase in math corresponds to the aforementioned percentages.

Given that the percentage increased between the class of 1976 and the class of 1989, one would expect it to have increased further since then. If one extrapolates linearly, one gets a ~6% difference in income for the class of 2002.

I found SAT score data from two sources, which I’ve given below. The data shows that economics majors score between 50 and 100 points higher than other majors, with more of the advantage in math than in verbal.

Heterogeneity in human capital investments: High school curriculum, college major, and careers (Table 1) gives information on SAT score by major for students from 1993-2003. Some of the data therein is in the following table. The columns are major, math SAT, verbal SAT, combined SAT, and the difference between total SAT and economics total SAT.

Economics 597 575 1172 0
PoliSci 542 571 1113 -59
History 558 595 1153 -19
Psychology 530 540 1070 -102

The 2009 paper Determining the Future Income of College Students gives figures as well, taken from a cohort of students who were between 13 and 17 in 1997. The columns are major, math SAT, verbal SAT, combined SAT, and the difference between total SAT and economics total SAT.

Economics 629 588 1217 0
PoliSci 573 580 1153 -64
History 552 616 1168 -49
English 562 609 1171 -46
Psychology 554 579 1133 -84
Sociology 486 508 994 -223

Based on this data, there’s a lot of uncertainty as to how much of the wage gap comes from ability as measured by standardized tests. But the wage gap can’t be fully explained by differences in pre-existing ability as measured by standardized test scores. Consider the case of economics vs. political science, where economics majors make 20% more. If one assumes that a 50 point increase in math SAT increases income by 6%, and that economics majors have math SAT 75 points higher than political science majors, then one finds that pre-existing ability as measured by standardized tests would predict a 9% wage gap, which is substantially less than 20%.

Comparison with graduates of elite colleges

Another perspective that shows that ability as measured by standardized tests can’t be driving most of the wage gap comes from comparing the earnings of economics majors with the earnings of graduates of elite colleges.

SAT scores of graduates of elite colleges are very high, with 75% of students scoring 700+ on a given section (at the 95th percentile or higher). The SAT scores of economics majors are lower: the highest subsection score listed above is 629 math, which is at the 85th percentile on the current SAT. This suggests that the 75th percentile of economics majors in SAT math is no more than the 93rd percentile for the general population (half way between 85th and 100th).

Payscale reports that graduates of elite colleges make on the order of $50k-$60k and that economics majors make ~$48k starting salaries. According to the National Association of Colleges and Employers Salary Survey, the 25th/50th/75th percentiles of earnings of economics majors are $43k/$53k/$66k. There’s some incongruity between the results of the different surveys, but it seems likely that the 75th percentile economics majors in starting salaries make more than the median graduate of an elite university. This is further supported by Payscale’s 2008 report, which says that the 75th percentile of midcareer earnings for economics majors is ~$140k, compared with ~$120k/year for the median graduate of an elite college.

So the 75th percentile economics majors have higher starting salary than median graduates elite colleges, despite having lower SAT scores. Furthermore, the median graduate of an elite college isn’t a randomly selected person with his or her SAT scores: he or she has other traits conducive to success (as measured by the college admissions process): despite these advantages, he or she makes less money than economics majors with lower SAT scores.

Note: The juxtaposition of the midcareer data from Payscale’s 2008 report with present day SAT averages may give an impression that the gap is larger than it is, because at the time when people who are currently in the middle of their career were in college, SAT averages at elite colleges were lower than they are now.

#4 Pre-existing desire to make money

Economics majors probably have more desire to make money than other liberal arts majors do, but the size of the effect is unclear.

Higher rates of selfishness?

As discussed in the section “#2 Acquisition of a desire to make money,” there’s psychology research purporting to show that economics students and professors placing material gain above helping others, relative to other people. In some cases this research does not disentangle correlation and causation, leaving open the possibility that those who choose to study economics give more weight to having money. As above, there’s reason to be skeptical of this research.

Evidence about the influence of financial motivations on major selection

A number of research papers address how much weight college students give to future earnings when selecting a major. These papers vary in their results or in how they frame their results, or both.

For example, How do young people choose college majors? by Montmarquette, Cannings, and Mahseredjian (2002) says

The results of the paper show that the expected earnings variable is essential in the choice of a college major.

whereas Ability Sorting and the Returns to College Major by Arcidiacono (2003) says

Even after controlling for selection, large earnings premiums exist for certain majors. Differences in monetary returns explain little of the ability sorting across majors; virtually all ability sorting is because of preferences for particular majors in college and the workplace, with the former being larger than the latter.

and Choosing the Field of Study in Post-Secondary Education: Do Expected Earnings Matter? by Beffy, Fougère and Maurel (2009) says

Simulating for each given major a 10 percent increase in the expected earnings suggests that expected earnings have a statistically significant but quantitatively small impact on the allocation of students across majors.

We’re interested in how much economics majors respond to financial incentives relative to other majors.

The most relevant paper here seems to be Modeling college major choices using elicited measures of expectations and counterfactuals by Arcidiacono, Hotz, and Kang (2010). The sample size is small and possibly unrepresentative in relevant respects. The authors studied 173 undergraduates at Duke University, ~20% of whom were economics majors, and asked them questions involving them hypothetically majoring in other subjects. They grouped students into the categories of majors “science,” “humanities,” “engineering,” “social sciences,” “economics,” and “public policy.”

They find that

  • Students in each major said that they would make more money if they were to major in economics than they would if they were to major in any other subject (Table 5).
  • When asked what they would major in if their expected earnings were the same across majors, only 16.6% said that they would major in economics, as opposed to the actual figure of 19.7% (Table 10).
  • Students of each major believed (on average) that they have the highest ability in their own major as opposed to others (Table 6).
  • When asked what they would major in if their ability levels were the same across subjects, 23.8% said that they would major in economics, as opposed to the actual figure of 19.7%.

Taken together, the first two bullet points give the impression that ~15% of economics majors are in it for the money whereas 85% are not. If true, this would establish an upper bound on the desire of economics majors to make money relative to other majors.

The third and fourth bullet points raise the possibility that some students in other majors are as responsive to financial incentives as the economics majors who are responsive to financial incentives, so that the actual gap in responsiveness to financial incentives could be smaller than the 15% figure suggests.

As psychologist Robert Cialdini discusses in Influence: The Psychology of Persuasion, once people have made a decision, they tend to come up with multiple reasons why it was the right decision, unrelated to their original reason. It could be that of the 85% who said that they would major in economics anyway, for some, if they thought that their expected earnings were the same across majors before having decided on economics then they would have majored in something else. So the gap in responsiveness to financial incentives could be larger than the 15% figure suggests.

A relevant study with a larger sample size is Choosing the Field of Study in Post-Secondary Education: Do Expected Earnings Matter? by Beffy, Fougère and Maurel. (I have not vetted their analysis, and don’t know whether or not it’s reliable.) They group majors into “Sciences,” “Humanities and Social Sciences” and “Law, Economics and Management.” They find that a 10% decrease in earnings (for a given subject group relative to others) reduces the percent of students who major in the subject group by 0.234 absolute percentage points for the sciences, 0.347 for the humanities and social sciences, and 0.432 for law, economics and management, suggesting that economics majors are more responsive to financial incentives. About 33% of students majored in each subject area, so the changes relative to number of majors in a given subject are on the order of 1%.

One could interpret this as evidence that the students aren’t very responsive to financial incentives altogether, with law, economics and management students only marginally more than humanities and social science students. But it’s possible that one would see much a much greater diverge between the groups if one looked at the impact of a 20% or higher decrease in earnings rather than a 10% decrease in earnings. Perhaps what’s going on is that even if law, economics and management students made 10% less, they’d still be making more than they would in other majors, and they’d switch precisely at the point where they started making less money than they would in other majors.

Since law, economics and management are grouped together, the gap could be coming from law and management rather than economics.

#5 Signaling

Majoring in economics probably signals desirable traits to employers, but the degree to which this is true, and the impact on expected earnings is unclear. (On the latter point, note that college major plausibly plays much less of a signaling role decisions about raises and promotions than it does in hiring decisions.)

It’s worth noting that majoring in economics doesn’t have to be an accurate signal of a desirable trait in order for it to have signaling benefits: all that’s necessary is that employers believe that it’s a signal of the trait.

The fact that economics majors make more is a signal that they’re better employees

Unless one attributes the wage gap entirely to signaling (which would correspond to a belief that employers are generally mistaken in paying economics majors more), one can know that economics majors tend to be better workers, even if one doesn’t know why. Thus, employers will take the fact that economics majors make more money as a signal of quality. So the wage gap itself gives rise to signaling benefits.

Employer surveys

According to a survey of the The Chronicle of Higher Education:
  • Economics is one of the most desired majors in business (pg. 67)
  • 19% of employers state that they look for specific majors, 44% value some over others, 34% say that they balance it with other factors, and 3% say that it’s not important at all. (pg. 64).

The preference for certain majors will be presumably be lower if one restricts to non-technical jobs. It should be noted that employers listed internships and employment during college as more significant than college major, with volunteer experience and extracurricular activities are not far behind. (pg. 24)

2013 Gallup poll of business leaders asked about the weights that they assign to different factors when making hiring decisions. What they indicated is summarized below. (The columns starting with the second are the percent who ranked the factor as “very important”, “somewhat important” “not very important” and “not at all important”)

Knowledge of field 84 14 2 0
Applied skills in field 79 16 2 2
College Major 28 42 22 8
College attended 9 37 40 14

Presumably it’s easier to assess knowledge of field and applied skills in field for experienced job candidates than for inexperienced job candidates, so that the role of college major in hiring decisions would decrease over time, as one would expect.

Quotations from economics departments

As with human capital acquisition, college economics department webpages generally say that employers consider economics majors to be desirable workers, and these sources are biased. They dominate Google hits when one searches for information on whether majoring in economics signals quality.

Quotations from economists

As above, economist Bryan Caplan thinks that economics teaches few employable skills, but also writes

1. “Mickey Mouse majors” = Majors with low financial rewards. Judged against standard #1, economics is clearly not a Mickey Mouse major. Adjusting for preexisting ability, economics is one of the most lucrative majors – almost on par with electrical engineering.

suggesting that he believes that being an economics major has significant signaling benefits.

We asked economics students to identify majors as hard, moderate, or easy, and we found that 33 percent viewed economics as hard, 3 percent said sociology was hard, 7 percent saw psychology as hard, and 13 percent thought political science was hard. Since other social sciences were the primary alternative majors that most of the economics students considered, that data is compelling evidence that the respondents perceived those other majors as too easy. Students likely reasoned that taking a “too easy” major would signal to potential employers that the student had chosen an easy path through college, thereby hurting their chances of being hired.

Quotations from former college students

From Graduates Weigh In: What Is the Value of a Humanities Degree?

Anton Troianovski:

This attitude tracked with Harvard’s general message to freshmen, one that I think many of us accepted at face value: if you find the field of study that excites you most, the job search will take care of itself. Classmates would sometimes say they’d heard that Goldman Sachs and McKinsey may well hire a star of something like the folklore and mythology program over yet another cookie-cutter economics grad. This was in the booming mid-2000s. I wonder whether the harder economic times since then have made that message—emphasizing learning for learning’s sake—less convincing.

Jessica E. Lessin:

Most of the people I knew in college studied humanities. But they tried to make themselves more marketable to employers by squeezing in a class or two on economics. I think they were right to follow their interests. Recruiters at the time seemed more focused on how well you did in class, not what you studied. But if you wanted to work on Wall Street or at a consulting firm, an econ class didn’t hurt.

From Economics, Once a Perplexing Subject, Is Enjoying a Bull Run at Universities

For many students, however, economics is just the quickest way to land a good job. David Reinstein, 22 years old, started at George Washington University in a dual program of economics and political science. By the time he graduated in June, he had dropped the politics for economics alone. “People are impressed because it’s difficult,” Mr. Reinstein said. “Economics is respected.” His resume also impressed CNA Corp., an Arlington, Va., government contractor where Mr. Reinstein landed a job as a research specialist.

Wall Street Oasis forum threads 

These mostly concern getting jobs in finance:

Liberal arts major= DEATH SENTENCE or NOT?,

Do employers see a difference between an economics or a psychology major?

Duke Econ Major?

rejected twice !! Too liberal for the bank?!

The starting salary vs. midcareer salary test

The same considerations in the subsection “The starting salary vs. midcareer salary test” of the section “#1 Human capital acquisition” of this post apply to assessing the role of signaling.

Other explanatory hypotheses

  • As diplostreetmix wrote at The Bill Fold, majoring in economics may not increase desire to make money relative to other desires, but rather, could help people learn to co-optimize to meet their goals better in general, and this could help them get higher paying jobs, even if the subject matter knowledge isn’t useful to them on the job.
  • There could be a correlation between finding economics interesting and finding certain jobs that happen to be high paying interesting, even in absence of a direct connection between the subject matter of economics and what’s done on the job, and independent of financial considerations. This would induce a correlation between majoring in economics and earning money.

Earnings of economics majors: general considerations

Some liberal arts majors make more money than others, but by far the ones who make the most are economics majors. The 2013-2014 Payscale Salary Report reports the following figures. The second column is median starting salary and the third is median mid-career salary, in thousands of dollars

Economics 50 96
Political Science 41 77
Philosophy 39 78
History 39 71
English Literature 40 71
Psychology 36 60
Sociology 37 55

This trend is robust, and I’ll give more supporting data as an appendix at the end of the post.

The fact that economics majors make so much more is often taken to mean that majoring in economics raises future earnings. Is this true? In this post I’ll discuss some general considerations relevant to determining this, and discuss the sort of data that one might try use to resolve the question. In future posts, I’ll offer some such data, with analysis and discussion.

I’d welcome any other ideas for testing the hypotheses, as well as pushback on the conceptual framework, and/or alternative hypotheses.

As Bryan Caplan spells out in Economic Models of Education: A Typology for Future Reference, in general, a correlation between education and income can come from any of three things

  • Human capital acquisition: Education develops students’ employable skills.
  • Ability bias: Obtaining an educational credential reflects greater or lesser pre-existing ability (that exists independently of what’s learned in school), which is later reflected in earnings.
  • Signaling: An educational credential signals pre-existing ability (which as before, can be independent of what’s learned in school) which makes employers more likely to hire one.

“Ability” here is best defined in a nonstandard way, as “traits conducive to making money.” An example of such a trait is intelligence, but there are other traits that are conducive to making money, such as the desire to succeed in lucrative careers, that don’t fit the standard definition of “ability.” Similarly, aside from acquiring human capital, one can also acquire other traits conducive to making money, such as the desire to make money. With this background in mind, consider the following hypotheses:

  1. Human capital acquisition — economics majors learn more employable skills in school than other the majors do, and this qualifies them for higher paying jobs.
  2. Acquisition of a desire to make money — Majoring in economics makes students want to make money more than they would have had they majored in other subjects, so that they seek higher paying jobs.
  3. Pre-existing ability as measured by tests  The people who choose to major in economics have higher standardized test scores than those who major in other subjects. This reflects underlying traits such as intelligence that make them perform better in job interviews, enable them to rise up the workplace ranks faster once hired and otherwise increase their earnings (for reasons not caused by their majoring in economics).
  4. Pre-existing desire to make money — The people who choose to major in economics are unusually determined to make money (or to succeed in lucrative careers for other reasons, which amounts to the same for our purposes). This will lead them to seek higher paying jobs (again, for reasons not caused by their majoring in economics).
  5. Signaling  Majoring in economics signals traits that employers find desirable.

In principle, any combination of these hypotheses could explain why economics majors make more money. These are not necessarily exhaustive: there could be other factors that play roles, but we’ll restrict consideration to #1-#5 here.

To the extent that #1, #2 and #5 explain the income gap, majoring in economics increases earnings (on average), and to the extent that #3 and #4 explain the income gap, majoring in economics does not increase earnings (on average). So for a high school or early college student who seeks to have high earnings, the question of the relative roles of these factors in explaining the earnings discrepancy is significant.

While #1, #2 and #5 all point toward majoring in economics increasing earnings, they may have very different practical implications from one another. Some examples of this:

  • If the effect was all due to #1, then learning the material taught in the courses past the point needed for getting A’s could increase income, whereas if the effect was all due to #5, then learning the material past the point needed for getting A’s would carry no additional benefit.
  • If the effect was all due to #2, then for somebody who already gives top priority to making money, majoring in economics would not increase earnings.

So determining the relative roles of #1, #2 and #5 can also be important.

To assess the relative roles of #1-#5, we’ll discuss some a priori reasons why they might or might not explain the income gap, and what one would expect of real world data if a given factor played a major role.

Human capital acquisition

There’s a great deal of material online claiming that majoring in economics builds skills that employers value. For example, Economics: The Most Employable Liberal Art says

While economics is technically classified as a liberal arts degree, it’s the only one with the distinction of offering both technical skills and a broad liberal arts education. That combination can prove to be very powerful, arming economics grads with in-demand knowledge in business, law, and math that look great on a resume, as well as soft skills that employers really want, including critical thinking, interpersonal abilities, and complex problem solving. Thanks to this powerhouse of technical-liberal skills, economics majors can find employment in a wide range of careers.

“An economics degree opens a lot of doors,” says Dr. Anca M. Cotet with the Seton Hall Department of Economics and Legal Studies. Chris Mader, managing director of corporate accounts with Randstad agrees. “

An education in economics is good preparation for almost any career path,” says Mader. “Economics majors generally have a holistic view of the business, and learn invaluable business skills and acumen that will be used throughout one’s career, no matter which industry they choose.” With these great opportunities, economics majors also enjoy a demand that puts them among the top majors by salary potential.

However, one can also find characterizations of other majors that paint them in favorable terms from the point of view of building employable skills, and even if economics did compare favorably, that wouldn’t mean that economics builds employable skills to an appreciable degree: maybe no liberal arts degrees build employable skills to an appreciable degree.

Economist Bryan Caplan has a different take from the people quoted above:

In my experience, undergraduate econ majors learn only two skills they’re likely to use in any job outside the Ivory Tower: (a) how to calculate a present discounted value, and (b) basic statistics. Except in top schools, I doubt most econ majors master either (a) or (b). The remainder of the economics curriculum simply isn’t vocational.

It could be that even if economics doesn’t teach material that’s directly relevant, studying economics indirectly builds skills such as critical thinking, which transfer over. Caplan comments on this, too:

Many educators sooth their consciences by insisting that “I teach my students how to think, not what to think.” But this platitude goes against a hundred years of educational psychology. Education is very narrow; students learn the material you specifically teach them… if you’re lucky.

To help resolve the question, ideally one would have a rich data set with anecdotal reports from former economics majors about how useful they’ve found what they learned in their coursework in their professional lives. Even this would not be decisive, because of people’s imperfect introspection.

One possible test for whether majoring in economics builds employable skills comes from comparing the growth of economics majors’ salaries over the course of theirs career with the growth of other majors’ salaries over the course of their careers. Suppose that it were true that the skills that economics majors built by majoring in economics are as useful at the beginning of their careers as they are midcareer. Then if majoring in economics built employable skills, one would expect percent increase in wages to decrease over time. Why? Once people enter the work force, they begin accumulating more employable skills: possibly at a faster rate than they did while they were in college. Even if economics majors are 2 years ahead in training upon entering the workforce, while that gap would initially be highly significant, 10 years down the road it would be considerably less so.

In practice, the skills that one learns in economics could become more useful (e.g. if higher level managerial type jobs use them more than entry level jobs) or less useful (e.g. because some people change fields of work over time, tending to move away from fields related to their major rather than toward fields related to their major). So there’s a lot of uncertainty about how a wage gap due to skills built from learning economics would evolve over the course of a career.

But one should expect there to be a general drift tendency in the direction of what one learns in college mattering less over the course of one’s career (even if this drift tendency may be outweighed by other factors), so that if the wage gap decreases over time, that’s evidence in favor of majoring in economics building employable skills, and if it remains constant or increases over time, that’s evidence against majoring in economics building employable skills.

Thus, by comparing percentage increase in wages across majors over the span of careers, one can obtain evidence for or against majoring in economics building employable skills.

Acquisition of desire to make money

Something that economics majors learn to a greater degree that those who major in other subjects is that income is a proxy to social value generated. Thus, majoring in economics will shift those who want to contribute social value from lower paying careers to higher paying careers.

It’s also been suggested that studying economics increases people’s selfishness on account economic models assuming self-interested agents (see e.g.  Economics makes you selfish and Are economists selfish? A lit review). To the extent that this is true, those who would otherwise have chosen work based on the social value generated rather than income may give higher weight to income than to social value contributed when selecting a career. Here too, majoring in economics would shift people from lower paying careers to higher paying careers. The research on studying economics increasing selfishness has been criticized as nonrobust, and may not prove what it’s been purported to — I just raise it as one possibility of many.

To investigate the possibility that majoring in economics increases desire to make money, one could survey recent college graduates about the evolution of their attitude toward making money over the course of college, and compare the results for economics majors with the results for liberal arts majors (perhaps also including questions on the role that they think their major played).

Preexisting ability as measured by standardized tests

SAT scores and other standardized test scores are known to correlate with earnings.

One reason that this could be is that standardized test scores are a proxy to IQ, and IQ is known to correlate with earnings, with the correlation thought to be partially causal. Another reason could be that scores may be partially a measure of test preparation, which could correlate with conscientiousness, which is known to correlate with income, with the correlation thought to be largely causal. Standardized test performance also reflects the ability to remain focused for the duration of the test, which one would expect to correlate with job performance.

Since the SAT is taken before college, SAT scores reflect ability that precedes majoring in economics. Thus, a difference in SAT scores between economics majors and the other majors would reflect a preexisting difference in ability between economics majors and the other majors. One can then compare the wage gap between economics majors and other majors with the wage gap between people who have SAT scores comparable to those of economics majors and SAT scores comparable to those of the other majors, to get a sense for the fraction of the wage gap that’s driven by the abilities measured by the SAT.

The GRE and LSAT also pick up on the abilities measured by the SAT. These are taken toward the end of college, after a student has taken courses for his or her major and are therefore an a priori weaker measure of pre-existing ability, but data on how average scores on the GRE and LSAT vary by major still has some relevance to the degree to which the wage gap between economics majors and other majors is driven by pre-existing ability.

The desire of economics majors to succeed in lucrative careers before selecting a major

If students believe that majoring in economics will help them succeed in lucrative careers (irrespective of whether it actually does), then one will expect to find an unusually high concentration of people amongst economics majors who want to succeed in lucrative careers. These people will be more likely to take high paying jobs (relative to their peers in other majors, who may give more weight to factors such as work-life balance and enjoyment of work). This could partially explain why economics majors make more money later on.

Why might students believe that majoring in economics will help them succeed in lucrative careers? Some possibilities:

  • Assuming that the correlation is causal — They may notice that economics majors make more money, and assume that the correlation between majoring in economics is causal.
  • Building human capital — They may think that economics builds employable skills more than other majors do. For example, they may mistakenly assume that the study of economics is the study of making money, because economics has something to do with money. Or, they may have object level knowledge that economics does in fact teach employable skills.
  • Signaling — See the section below.

Furthermore, if students in economics want to make money more, then students who want to make money may want to major in economics more, as it gives them an opportunity to be around people like themselves (the major could serve as a better “cultural fit” for them).

One could assess the relative desire of economics majors to make money by surveying students on why they chose their major, listing “financial returns” as one of the choices, and compare the strength and frequency with which economics majors give this weight, relative to other majors.

The signaling value of majoring in economics

If employers view economics majors more favorably than they view other majors, this will raise the expected earnings of economics majors. Some positive signals that majoring in economics might send to employers are:

  • Having built employable skills through studying economics. To the extent that employers believe (whether rightly or wrongly) that majoring in economics builds employable skills more than the other majors do, majoring in economics sends a positive signal.
  • Strong performance on what standardized tests measure. As above, this is correlated with earnings, and relatedly, job performance.
  • Desire to succeed in lucrative careers. Majoring in economics would signal this if economics majors are thought to have such a desire. As above, there are reasons to think that economics majors do disproportionately have this desire. Employers may believe (whether rightly or wrongly) that this is a desire will lead the job candidate to try to do a good job to get raises and promotions.
  • Work ethic. Majoring in economics would signal this trait if economics were thought to be a more difficult major than other liberal arts majors. My impression is that this is what people generally believe.

One could assess the degree to which employers prefer economics majors by referring to survey data. Ideally, one would have survey data specifically on the strength of their preference for an economics degree over a degree in another liberal art, but in absence of this, one can look for data on (a) how much they say that a major matters and (b) whether they list economics as a preferred major.

Analogous to the situation with human capital acquisition, there’s reason to think that the signaling benefits of majoring in economics decrease over time:

  • As one progresses through one’s career, one develops a history of work experience, and employable skills, and the role of these things relative to the role of what one majored in increases over time.
  • Once one has been hired, one’s major doesn’t figure in to decisions about promotions and raises.

Based on this consideration, if the percentage by which economics majors are ahead decreases over the course of their careers, this is evidence in favor of signaling benefits playing a role in explaining the wage gap, whereas if the percentage remains the same or increases, this is evidence against signaling benefits playing a role in explaining the wage gap.


We’ve presented five factors that might lead economics majors to make more money than other liberal arts majors. Majoring in economics could increase employable skills, reflect employable skills, increase desire to make money, reflect desire to make money, and/or signal desirable traits to employers. The relative roles of these things has relevance to people who give substantial weight to their future earnings and are trying to choose between majors. In a future post, I’ll offer data and analysis that tests some of the hypotheses raised in this post.

Appendix: Data showing that economics majors make more

Here we report on survey data from seven sources, which consistently shows that economics majors make more money. The surveys sometimes have different methodologies and study different populations, so one should exercise caution in comparing numbers between surveys. Unless otherwise specified, numbers are in thousands of dollars. In some cases the sources did not have data on all of the majors that we considered: in such cases we listed the data that was available.

The 2013-2014 Payscale Salary Report reports the following figures. The first column is major, followed by starting salary, midcareer salary, starting salary divided by economics major starting salary, and midcareer salary divided by economics major midcareer salary.

Economics 50 96 1 1
PoliSci 41 77 0.82 0.8
Philosophy 39 78 0.78 0.81
History 39 71 0.78 0.73
English 40 71 0.8 0.73
Psychology 36 60 0.72 0.62
Sociology 37 55 0.74 0.57

The National Association of Colleges and Employers Salary Survey gave 25th / 50th / 75th percentiles of starting salaries by major. In the last three columns, we compute these as percentages of the corresponding figures for economics.

Economics 43 53 66 1 1 1
PoliSci 33 40 50 0.76 0.75 0.75
History 34 40 48 0.79 0.75 0.72
English 32 38 48 0.74 0.71 0.72
Psychology 30 35 43 0.69 0.66 0.65
Sociology 29 35 43 0.67 0.66 0.65

An PayScale report from 2008 gives more refined information about midcareer earnings by major: at the 10th, 25th, 50th, 75th and 90th percentiles

Economics 50 70 98 145 210
PoliSci 41 55 78 114 168
Philosophy 35 52 81 127 168
History 37 49 71 103 149
English 33 44 64 93 133
Psychology 31 42 60 87 127
Sociology 30 40 58 81 118

And here are the earnings as a fraction of earnings of economics majors at the corresponding percentile:

Economics 1 1 1 1 1
PoliSci 0.82 0.78 0.79 0.78 0.8
Philosophy 0.7 0.74 0.82 0.87 0.8
History 0.74 0.7 0.72 0.71 0.7
English 0.66 0.62 0.65 0.64 0.63
Psychology 0.62 0.6 0.61 0.6 0.6
Sociology 0.6 0.57 0.59 0.55 0.56

What’s It Worth: The Economic Value of College Majors gives 25th / 50th / 75th percentiles by given major (including both people just stating out and and people midcareer). The first three columns have these, and the last three have these as fractions of the corresponding economics major salaries.

Economics 42 70 108 1 1 1
PoliSci 39 59 90 0.92 0.84 0.83
History 34 50 77 0.8 0.71 0.71
English 34 49 71 0.8 0.7 0.65
Psychology 31 45 65 0.73 0.64 0.6
Sociology 33 45 68 0.78 0.64 0.62

Heterogeneity in human capital investments: High school curriculum, college major, and careers (Table 1) gives hourly wage data by major using data from 2009, at the 10th percentile and 90th percentile, and at the 90th percentile excluding those with professional degrees, and comes up with the following. As above, the final three columns are salaries as fraction of economics majors’ salaries

Economics 15.25 111.76 78.43 1 1 1
PoliSci 14.71 75.41 57.25 0.96 0.67 0.72
History 12.65 64.17 49.02 0.82 0.57 0.62
Psychology 12.25 49.02 41.18 0.80 0.43 0.52
At the low end, the differentials between the economics majors and others are lower than that reported in the 2008 Payscale report, and at the high end they’re greater. It’s unclear what’s going on here (presumably a difference in survey methodology), but regardless, economics majors come out on top.

The Census Bureau’s 2010 American Community Survey fraction of people who majored in a given subject who are in the top 1% of Americans in earning power, by subject. Percentages are below:

Economics 8.2
PoliSci 6.2
History 4.7
Psychology 4.3
English 3.8

According to a Economics: Good Choice of Major for Future CEOs by Patricia Flynn and Michael Quinn:

Economics ranked third with 9% of the CEOs of the S&P 500 companies in 2004 being undergraduate Economics majors, behind Business Administration and Engineering majors, each of which accounted for 20% of the CEOs. When adjusting for size of the pool of graduates, those with undergraduate degrees in Economics are shown to have had a greater likelihood of becoming an S&P 500 CEO than any other major.

In Table 5, the authors give the probability of going on to be a CEO, as a fraction of the probability for an economics major:

Economics 1
PoliSci 0.31
History 0.25
English 0.08
Sociology 0.05
Psychology 0.04

How much does where you go to college affect earnings?

Students who go to more selective colleges make more money later in life. The 2013-2014 PayScale College Salary Report gives starting salaries of ~$60k for graduates of Ivy League schools vs. ~$45k/year for graduates of mid-tier state schools, and mid-career salaries of ~$110k/year for graduates of Ivy League schools vs. ~$80k/year for mid-tier state schools, so the difference is about 30%.

This partially reflects students who go to more selective colleges being more able and ambitious, as opposed to attending a more selective college boosting one’s income. How much does attending boost income? The famous paper Estimating the Return to College Selectivity Over the Career Using Administrative Earning Data (2011) by Dale and Krueger raises the possibility that on average, attending a more selective college doesn’t raise earnings at all. Specifically, controlling for

  • Student high school GPA
  • Student SAT score
  • The average SAT score of the colleges that a student applied for1
  • The number of applications that the student submitted
  • Various demographic factors (race, sex, parental education)

they found that as a group, there was no statistically significant difference in income later in life between students who went to more selective colleges and students who went to less selective colleges. Their finding is somewhat robust: it’s based on a large (~10k) sample size, it’s true both of the class of 1976 and the class of 1989, it’s true of the class of 1976 from age 25 through age 50 and it’s true both of men and of women.2,3

A couple of caveats:

  • Blacks, Hispanics, and children of parents who don’t have college degrees and who attended more selective schools earned more than those who did not.
  • The 27 universities that the students were drawn from are highly selective: if one were to look at less selective universities, one might get different results.

Dale and Krueger’s central finding has been taken to be evidence that going to a more selective college does not increase one’s earnings, contrary to conventional wisdom.

There are many factors that could give rise to a difference in income between those who attended more selective colleges, some of which favor those who attended less selective colleges, and could counterbalance others that increase earnings. I list some potential contributing factors below (some of which were pointed out by Dale and Krueger). In each case, whether these effects are present is unclear, and to the extent that they are there, the overall effect of them is sometimes unclear, but they could give rise to a difference between the two groups.

Selection effects

These have no bearing on whether going to a more selective college increases expected earnings.


The cost of attending a more selective college could (after taking a student’s ability and merit-based financial aid into account) be higher or lower than the cost of attending a selective college. So the choice of attending a more selective school could reflect having a family that’s willing to pay more for college (and/or the willingness of the student for his or her family to pay).

Future career plans

Students who choose to attend more selective schools could be more or less likely to go into academia than students who don’t. Academics make less money than other people do (after controlling for factors such as GPA, SAT scores and conscientiousness). Similarly, those who attend more selective schools may have other career preferences that feed into expected earnings

For students who go on to professional school (law, medicine or business), college attended doesn’t matter as much for later life prospects. So attending a more selective college could reflect lower intent to go on to professional school. The earnings of people who go onto professional school are generally higher than those of people who don’t – this points in the direction of expected earnings being higher for those who go to less selective colleges.

Concern for prestige

Students who choose to attend more selective colleges plausibly care more about prestige. This desire for prestige could correspond to more desire to make money later in life – this points in the direction of expected earnings being higher for those who go to more selective colleges.


The impact of prestige of college attended on hiring decisions

According to research by Lauren Rivera, high paying elite professional service firms (investment banks, law firms, and management consulting firms) give a lot of weight to whether job applicants attended top four universities when making their hiring decisions.

More broadly, employers give weight to the prestige of college attended. However, the effect size is smaller than it might seem. In a 2013 Gallup Poll, 9% of business leaders said that the college a job applicant attended is “very important” to managers making hiring decisions, and 37% said that it’s “somewhat important.” Notably,

(i) employers listed college attended as the least important of the 4 factors that they were asked about

(ii) the American public gives more credence to employers weighting college attended when making hiring decisions: 30% think it’s “very important” and 50% think it’s “somewhat important.”

(The 2013 data is much more recent than the Dale-Krueger data, but still provides relevant evidence.)

Once one is hired, where one went to college won’t play a role in professional advancement at that firm (except to the extent that it built relevant skills).

Influence on grades

Carl Shulman suggested that going to a more selective school reduces one’s expected GPA, because of higher grading standards. It’s unclear to me whether this is true, and the effect could even cut the other way, but there’s plausibly an effect in some direction. Reduced GPA reduces one’s prospects for getting into medical or law school. Perusing forums for applicants, one finds many people saying that GPA is a dominant factor in admissions, one that’s far more important than prestige of college attended.

Influence on major choice

Attending a more selective school reduces one’s relative standing amongst students in a given major. This can lead to students at more selective schools choosing a less demanding major than they otherwise would have (whether because the major requires more effort than it would have, because one finds it intolerable to be one of the weaker students majoring in a given subject, or for some other reason). In the 2013 Gallup Poll cited above, business leaders surveyed listed the subject that a student majored in as significantly more important than college attended, in the context of hiring decisions.

Treatment effects

Peer group

Having a more capable peer group can lead to better learning opportunities, and higher expected earnings. Ben Kuhnwrote

By watching how more competent people work and think, you can often pick up useful study habits and better techniques for the subject you’re studying. I’ve found this especially true in CS classes, where I’ve had this experience from both sides, e.g. teaching classmates how to use Git and picking up C coding style and tricks from better programmers.

It can also give one access to better advice: Ben Kuhn also wrote:

Knowing talented students has given me info about several excellent courses, as well as summer opportunities, I wouldn’t otherwise have known about.

These considerations generally favor more selective schools, but not as strongly as might meet the eye: less selective schools often have honors courses and honors programs, where one might be able to meet students as capable as those who one would be interacting with at less selective colleges (though the best students at more selective colleges will generally be stronger than the best students at less selective colleges).

Networking benefits

Going to a more selective college will generally expose one to people who will be in higher places later on in life, and who will correspondingly be able to connect one with influential people in one’s professional field, who may get one a high paying job and so forth. Such people may also serve as professional collaborators, for example, if one wants to do a startup right out of college.

As above, the effect here is smaller than might initially meet the eye, because one might be able to get similar benefits by interacting with the most capable students at a less selective college.


Some people have suggested that being a “small fish in a big pond” reduces students’ confidence relative to being a “big fish in a small pond.” Assuming this, to the extent that confidence increase later life earnings, all else being equal, attending a more selective school will reduce expected earnings.

Better learning due to attention from professors

Some people have found that being a “big fish in a small pond” is conducive to getting more attention from the professors in one’s classes, on account of standing out. This can increase the amount that a student learns, because of professors’ greater willingness to spend time on personalized instruction.


Some people who I know report to having a subjective sense that being in a less elite environment was helpful to them, because it forced them to be independent (on account of being different from their peers), whereas had they been in an elite environment, they would have “gone with the flow” and uncritically made their decisions based on what their peers were doing. All else being equal, this factor would increase expected earnings of those who attend less selective colleges.

Influence on major choice

As above, attending a more selective college can reduce the probability that one will major in a demanding subject. Aside from having signaling implications, this also reduces the chances that one will acquire technical skills required for higher paying jobs.

Influence on career choice

Going to a more selective college could nudge one toward or away from academia, going into the non-profit world, getting a professional degree, etc. Earnings vary across these fields, and this could give rise to a difference between the groups.


Before thinking seriously about the paper by Dale-Krueger, I had subscribed to the conventional wisdom that going to a more selective college generally boosts expected earnings. Thinking it over more carefully, it’s now genuinely unclear to me whether this is the case, and it could reduce expected earnings in general.

Rather than taking the Dale-Krueger finding to be definitive, one should give some weight to conventional wisdom, on the grounds that the paper might have hidden methodological errors, or have ceased to be relevant in the present day. But in view of

  1. The Dale-Krueger finding
  2. The fact that there are a number of ways in which going to a more selective college could decrease earnings
  3. The fact that and the fact that the salient advantages of going to a more selective college are less significant than they might initially appear
  4. The fact that conventional wisdom is at least partially rooted in a conflation of correlation and causation

it seems reasonable to adopt a “best guess” that if going to a more selective college does increase expected earnings, the effect size isn’t high (perhaps on the order of ~2% – an intuitive guess based on the data given in the Dale-Krueger paper).

What implications does this have for students who are trying to decide what college to go to, or how much to focus on getting into college? First some general considerations:

  • Rather than taking the Dale-Krueger finding to be definitive, one should give some weight to conventional wisdom, on the grounds that the paper might have hidden methodological errors, or have ceased to be relevant in the present day. But in view of (i) the Dale-Krueger finding (ii) the fact that there are many ways in which going to a more selective college could decrease earnings (iii) the fact that and the fact that conventional wisdom is at least partially rooted in a conflation of correlation and causation, it seems reasonable to adopt a “best guess” that if going to a more selective college does increase expected earnings, the effect size isn’t high (perhaps on the order of ~2% – this is an intuitive guess based on the data given in the Dale-Krueger paper).
  • Even if the causal effects lead to there being no difference in expected earnings on average and at the moment, that doesn’t mean that there’s no difference for a rational actor who wants to maximize expected earnings. For example, if attending a more selective (or less selective) college were to reduce expected earnings on account of increasing the probability that students go into academia, if one doesn’t want one’s earnings to be reduced, one can simply buck the trend and not go into academia. However, there are certain casual effects over which one doesn’t have control (such as the fact that elite firms look more favorably on students who graduated from top 4 colleges)
  • The casual effects will vary from person to person. For example, going to a college that elite finance firms look on favorably will have an effect for those who aspire to go into finance to a greater degree that it won’t for those who don’t aspire to go into finance. A high school student can try to assess which causal effects will apply to him or her. But it can be hard to tell ahead of time: before entering college, one might be unclear on (or mistake about) whether one wants to go into finance.
  • Expected earnings is not the only metric of the value of going to college. There’s also the consumptive experience, as well as well as its impact on career success that’s not reflected in earnings. It’s plausible that going to a more selective college matters more for professional success for people who will be going on to academia than it does in general.
Irrespective of the considerations above:
  • The Dale-Krueger finding generally argues points in the direction of giving greater weight to cost differences between colleges than to differences in prestige. Depending on one’s family’s income and savings, going to Harvard can be cheaper than going to Berkeley, but for other families there will be a difference between the two on the order of $100k (which if invested for 30 years would grow to ~$800k).
  • The Dale-Krueger finding points in the direction of effort spent getting into college being less cost-effective than most people think, which should shift one in the direction of spending less effort on it and more effort on building employable skills, enjoying life, and contributing social value.


[1] You might wonder why the authors didn’t control for the average SAT score of the colleges at which the students were accepted. The authors did something like this (actually, comparing students who had been accepted at the exact same set of colleges) in a 2002 paper, and obtained similar results. From the paper: “The matched applicant model and self-revelation model yielded coefficients that were similar in size, but the self-revelation model yielded smaller standard errors. Because of the smaller sample size in the present analysis, we therefore focus on the self-revelation model.”

[2] The authors say this in the text of the paper, but when I look at Table 4 of the paper on page 32 of the PDF, the data seems to indicate that for women from the 1976 cohort broken down into age groups, there is a statistically significant difference, in favor of those who attended less selective schools. But I assume that I’m misinterpreting the table: I’d welcome any help interpreting the data on this point.

[3] The authors qualify this by saying “The estimates from the selection-adjusted models are imprecise, especially for the 1989 cohort. Thus, even though the point-estimates for the return to school quality are close to zero, the upper-bound of the 95 percent confidence intervals for these estimates are sometimes sizeable.”

Career prospects for physics majors

Physics is attractive to many highly intellectually capable students, because

  • Physical theories represent pinnacles of human achievement
  • It’s intellectually stimulating
  • It has a reputation for being a subject that smart people do

See the comments on the post What attracts smart and curious young people to physics?

But what of career prospects?

In an answer to the Quora question What is it like to major in physics? PhD physicist Joshua Parks wrote:

It may not be too crazy to claim that as far as career options go, physics majors may be much more like English or other humanities majors (who often make career choices unrelated to their study) than their science and engineering counterparts.

At Physics Forums, ParticleGrl wrote

If you are an engineer, you can almost certainly get a job in a technical field right out of college. Physics majors, on the other hand, end up all over the place (insurance, finance, teaching high school, programming, etc).

We discuss some career paths for physics majors below.


  • The primary reason to major in physics (outside of intrinsic interest) is as a prerequisite to a physics PhD or as background for teaching high school physics.
  • Over 50% of those who get PhDs in physics don’t become physicists, often because of difficulty finding jobs.
  • Physics majors are able to get jobs in other quantitative fields, but often with more difficulty than they would had they majored in those fields.

The popularity of physics as a major

The fraction of students who major in physics is small. What’s It Worth?: The Economic Value of College Majors by the Georgetown University Center on Education and the Workforce (pg. 162) reports that there are 936k people with Bachelor’s degrees in physical sciences, but only 91k with degrees in physics. Assuming that there are 50 years worth of people with Bachelor’s degrees in the United States, we get figures of about 20k physical sciences majors per year and 2k physics majors per year. This is in consonance with areport of the National Center for Educational Statistics, which gives a figure of 20k physical science majors who graduated in 2005. There are about 1.3 million college majors a year, so on the order of 0.2% of college graduates majored in physics.

The proportion increases significantly if one considers the population of highly intellectually capable students. For example, about 2% of Stanford undergraduates major in physics. The proportion will be still higher if one considers the population of Stanford’s most intellectually capable students.


The Bureau of Labor Statistics reports that 17k people work as physicists, so about 20% of physics majors.

Majoring in physics is a step toward becoming a physicist, but it’s usually not sufficient. In an anonymous answer to the Quora quest What is it like to major in physics?, the answerer reports

There are no jobs in physics as the BS level. You need a PhD to do work related to physics, and even work at the Masters level is not that great (so I’ve heard).

This may not literally be true: the American Physical Society reports that 5% of physics majors who enter the workforce right after college work in physics or astronomy. But broadly, a physics PhD seems to be a prerequisite to becoming a physicist.

Graduate school is a common path for physics majors. What’s It Worth? reports (pg. 27) that 67% of physics majors go on to earn a graduate degree (without giving a breakdown of what kinds of graduate degrees they get). The American Institute of Physics reportsthat there are about 900 US citizens who earn physics PhDs a year, suggesting that a large fraction (30+%) of the ~2k physics majors who graduate in a given year go on to earn PhDs in physics.

The default career path for a PhD physicist is academia. We give some general considerations on our page on Academia as a career option. There seems to be a general consensus that the job market in physics academia is extremely competitive. Don’t Become a Scientist! by Jonathan Katz describes the scarcity of jobs relative to PhDs and its implications. Physicist rknop writes

My own field is physics, and the problem of physicists being trained for and expected to get tenure-track faculty positions, without enough of these positions being out there, has been a sore topic for two decades (at least). […] There is absolutely no guarantee that the PhD will allow them to spend the rest of their lives in physics research.

Putting the number of physicists together with the number of physics PhDs, it appears as though roughly 50% of physics PhDs are physicists (whether in academia or industry).

Success in physics seems to be driven in large part by intelligence, so exceptionally intelligent people may have an easy time getting a job, but they have to be sufficiently intelligent to stand out amongst a population that’s already strongly selected for intelligence.

Computer programming / software engineering

What’s It Worth? (pg. 165) reports that 19% of physics majors end up in “computer services.” This is vague, but it seems reasonable to guess that it’s mostly software engineering. Answers to the Quora question Why are there so many physics majors in software engineering? give some reasons for this.

Physics majors’ coursework and research can involve computer programming, but this tends to be limited. Broadly, if one wants to be a software engineer as a physics major, one has to minor in or double major in computer science, or spend a significant amount of time programming on one’s own. In general, one can get a job as a software engineer without a computer science degree, so majoring in physics exclusively doesn’t bar one from the career path, but it also seems strictly inferior to majoring in computer science from a professional point of view, for future software engineers.

In an answer to Can a physics major get hired as a software engineer? at Physics Forums, fss writes

You will start out at a disadvantage compared to computer science people who have demonstrated programming ability, and it will be up to you to decide how best to show that you can bring something to the table that would make up for this deficiency (real or perceived).


The American Physical Society reports that 32% of physics majors who enter the workforce directly go into engineering. What’s It Worth? (pg. 165) reports that 17% of physics majors are engineers.

The answers to Can a Physics major get a job as an engineer? and Engineering Job with a Physics Degree at Physics Forum suggest that physics majors can get jobs as engineers, but that they’re at a disadvantage relative to engineering majors, and that those who plan to be engineers should major in engineering.

Physics majors are sometimes able to go to engineering graduate school, for example, Dan Recht.

High school teaching

The Physics Teacher Education Coalition reports that there are 27k high school physics teachers, 35% of whom have degrees in physics or physics education, suggesting that up to 10% of physics majors become high school physics teachers. We have not yet done a writeup on high school teaching as a career, but hope to do so.


  • Payscale reports that median midcareer salary for physics majors is $101k/year, which ranks 9th in median midcareer salary amongst majors, after computer science, actuarial mathematics, and some engineering specialties.
  • The median starting salary for physics majors of $53k/year is lower than the median starting salary for engineers, which is more like $60k-$65k/year.
  • What’s It Worth? (pgs. 23-24) reports that the 25th percentile of physics majors’ income is $38k/year, compared with $85k/year for engineering specialties.

The relatively low median starting salary and 25th percentile salary may be dragged down substantially by the fact that physics majors attend graduate school and do postdocs with higher frequency than engineering majors do, during which they have low earnings.

After controlling for years of education and intelligence, physics majors make less than engineers, even mid-career. As above, physics majors complete PhDs more frequently than engineering majors do, and one source reports that physics majors’ average SAT scores are about 100 points higher than engineering and computer science majors’ on a 1600 point scale (equating to about 0.5 SD in IQ). So it’s plausible that they make less money than their counterparts of similar intelligence who majored in engineering or computer science. This doesn’t necessarily mean that they couldn’t get jobs where they made more money – it could be that they prefer lower paying academic jobs over higher paying jobs outside of physics.

Biomedical research as a career

I did some preliminary research on biomedical research as a career. The case for becoming a biomedical researcher looks to be weak for most candidates for the career. Are there important points in favor of pursuing a career in biomedical research that I’m missing?


  • Some people find biomedical research very rewarding, but the job involves a lot of grant writing, not only research.
  • Job security for biomedical researchers in academia is extremely poor before tenure. We still have to research exit options for those who leave academia.
  • Biomedical researchers make substantially less money over a life time than they could in other fields.
  • The job involves ~60 hours of work per week
  • While biomedical research has historically produced a great deal of value, the situation today is more ambiguous, and it appears that the average biomedical researcher does little to advance the field.


The nature of the work

According to How to succeed in science: a concise guide for young biomedical scientists. Part I: taking the plunge by Yewdell (2009)

for individuals with a hunger for knowledge and an insatiable curiosity about how things work, science offers a constant challenge and, best of all, the intense thrill of discovery.  What can match being the first person who has ever lived to know something new about nature? And not just the big, infrequent, paradigm-making (or breaking) discoveries, but the small, incremental discoveries that occur on a daily or weekly basis too. If this doesn’t give you goosebumps and if you are not in a rush to get to the laboratory in the morning to find the results of yesterday’s experiment, then you should seriously consider a non-laboratory career.

However, research is not the only part of the job: Yewdell writes

For your entire career as a PI, you will put inordinate efforts into writing grants

This is in consonance with GiveWell’s post Exploring Life Science Funding which says

The existing system focuses on time-consuming, paperwork-heavy grant applications for individual investigators.

GiveWell’s post also hints at researchers being constrained with respect to the research that they’re able to get funding for:

The existing system favors a particular brand of research – generally incremental testing of particular hypotheses – and is less suited to supporting research that doesn’t fit into this mold. Research that doesn’t fit into this mold may include: (i) Very high-risk research representing a small chance of a big breakthrough. (ii) Research that focuses on developing improved tools and techniques (for example, better microscopy or better genome sequencing), rather than on directly investigating particular hypotheses. (iii) “Translational research” aiming to improve the transition between basic scientific discoveries and clinical applications, and not focused on traditionally “academic” topics (for example, research focusing on predicting drug toxicity).

Job security

Our writeup on job security in academia gives some general considerations.

Concerning biomedical research specifically, The Scientific Workforce Policy Debate: Do We Produce too Many Biomedical Trainees? reports that

During the period from 1993-2003, the probability that a postdoc in the U.S. was in a tenure-track PI position 5-6 years after obtaining their PhD ranged from 15-23% (Garrison and McGuire, 2007).

This graphic says that after finishing graduate school / postdoc, of biomedical research PhDs, 18% go into non-research science jobs, 6% go into government research, 43% go into academia or teaching, 18% go into industrial research, 13% do work outside of science and 2% are unemployed. Roughly 50% of those who complete a postdoc and go into academia get tenure, and the career outcomes for those who don’t get tenure are unreported.

Some of the jobs that biomedical researchers get outside of academia are jobs that they could have gotten without doing a PhD or postdoc.

An important question is that of how correlated research ability is with job security. If luck plays a sufficiently large role then high ability doesn’t guarantee a job, whereas if skill can overcome luck, then those who are skilled can be confident that they’ll be able to get jobs. An interview with Prof. Andrew McMichael at the 80K blog seems to suggest that sufficiently high quality researchers can get jobs and funding. However, going into graduate school, one’s ability level may not be clear.

It’s unclear how job security is changing over time. In 2010, the Bureau of Labor Statistics reported that the number of jobs was expected to grow 36% over 10 years (much faster than average). But in 2012, the Bureau of Labor Statistics reportedthat the number of jobs is expected to grow 13% over 10 years, and in the intervening time the number of jobs had grown only 3%. So there appears to have been a substantial change in outlook in only two years. The job growth rate forecasts have to be viewed in juxtaposition with the expected change in number of new PhDs. According to one source, the National Institutes of Health found that the number of new PhDs increased by 50% between 2002 and 2009. If this rate were to be sustained, the ratio of jobs to job candidates would decrease even more.

I plan on researching exit options

Work-life balance

According to Yewdell (2009)

As a graduate student, you should be spending a minimum of 40 hours per week actually designing, performing or interpreting experiments. As there are many other necessary things to do during the day (for example, reading the literature, attending seminars and journal club, talking to colleagues both formally and informally, and common laboratory jobs), this means you will be spending 60 or more hours per week in science-associated activities.

This is corroborated by career coach Marty Nemko, who wrote

You spend most of your 60-to-70-hour workweek alone in a lab or at your desk, with little people contact.

Biomedical researchers who stay in academia are often constrained with respect to the geographic location where they can get jobs. See our writeup on job location options for academics.


Getting a PhD in a biomedical research field takes 6 to 7 years, during which one makes substantially less money than one could otherwise make. It’s been reported that the average biology PhD had $45k in debt as of 2004.

Salaries rise afterward, but not rapidly: as of 2009, the starting salary for a postdoc was ~$37k/year (pg. 141), and postdoctoral appointments last 4 years.

According to the Bureau of Labor Statistics

Colleges, Universities, and Professional Schools are next in employment, and pay a mean wage of $61,320 per year. Completing the five areas with the most employment are Pharmaceutical and Medicine Manufacturing ($92,130), General Medical and Surgical Hospitals ($80,090) and Drugs and Druggists’ Sundries Merchant Wholesalers ($93,090).

The “Colleges, Universities, and Professional Schools” category includes postdocs: if one considers professors only, the figure will be more like $80k/year.

According to Yewdell (2009)

If you do achieve the ‘Holy Grail’ of full professorship then you will not be poor, but you will be far worse off financially than nearly all of your peers who have similar levels of talent, energy and dedication, but who chose other careers.

Career coach Marty Nemko wrote

“According to MIT faculty member Philip Greenspun, Adjusted for IQ, quantitative skills, and working hours, jobs in science are the lowest paid in the United States….”

A small number of biomedical researchers command high salaries: for example, one source reports that there are 20 in the country with earnings at the $240k+ level.

Some sources report that biomedical researchers can become very wealthy if as early employees of successful biotech startups, but this is very rare.

Social Value

Historically, a large fraction of increase in lifespan and quality of life has been due to biomedical research (e.g. vaccines). Yewdell (2009) wrote

Society desperately needs your talents […] For rationally thinking people with an altruistic bent, life can be no more rewarding than when practising the scientific method for the benefit of all of the denizens of this fragile planet.

Some points to keep in mind in assessing the social value of biomedical research are

  • Diminishing returns  Much of the increase in lifespan between 1950 and now was due to cardiovascular disease research, with the gains mostly halting by 1990. There have been significant advances in recent years, such as AIDS treatment drugs, statins, psychiatric drugs. But one should expect the increase in quality of life and lifespan per researcher to go down over time, because of low hanging fruit being plucked, barring radical advances coming from anti-aging research and unexpected sources.
  • Low replication rates — The fact that large fraction of studies don’t replicate suggesting that much research doesn’t move science forward.
  • Power law distribution of research contributions A small fraction of researchers produce 100x+ as much value as the average researcher. To the extent that success is driven by skill rather than luck, prospects for impact depend heavily on your ability.

80,000 Hours plans to publish an overview of biomedical research that will address the social value of going into biomedical research in more detail.

See also

Biomedical Research Workforce Working Group Report (2012) by the National Institutes of Health.

How to succeed in science: a concise guide for young biomedical scientists. Part I: taking the plunge (2009) by Jonathan Yewdell.

How valuable is volunteering?

This essay was written for high school and college students who are considering volunteering. I’m interested in finding high social value activities for high school and college students to engage in, and would be grateful for any suggestions.

High school and college students are often just starting to think about how to make a difference and improve the world. One salient option available to them is volunteering. How valuable is volunteering?

One way in which volunteering can be valuable is that it can be enjoyable. This is the primary motivation of some volunteers. Another way in which volunteering can be valuable is that it can build skills. Building skills is valuable to the extent that you need them later on. As an example, working on an open source software project is often cited as a good way of developing programming skills.

What of the direct social value of volunteering to others? There are many factors that cut against volunteering having social value to others in general:


Factors that cut against volunteering having social value

Volunteering to help people who can afford to pay generally doesn’t help them much, or simply saves them money

In general, people are willing to pay for work that they find useful. If you’re doing volunteer work to help people who have the capacity to pay, you’re often either:

  • Doing work that doesn’t help them enough for them to be willing to pay for it.
  • Saving them some money.

Saving people money when they can afford to pay is not an effective way of helping people.

Volunteering to help people who would be willing to pay can reduce the job prospects of those who would be paid

The article before you pay to volunteer abroad, think of the harm you might do reports on Americans doing volunteer projects in Cambodia. The projects are ones that locals would have otherwise been willing to pay poor Cambodians to do. Because the Americans were willing to do them for free, the poor Cambodians weren’t hired.

Volunteer activities targeted at those in need are often less helpful than giving cash

People generally know what they need best better than outsiders do, and this points in the direction of giving them money to purchase the services and goods that they need most rather than providing services that they may or may not benefit from.

There are exceptions to this – for example, it may be more efficient to have a soup kitchen for homeless people than to give them money to buy food, because one can serve many homeless people simultaneously, cutting down on the costs of facilities and preparation. But unless you have reason to believe that

  • The services would be the best for the beneficiaries, but they would be irrational and not purchase it
  • Providing the services to many people has substantial efficiency benefits

you should adopt the presumption that giving cash is better than engaging in volunteer activities to help the beneficiaries.

Relatedly, GiveWell ranks GiveDirectly (which transfers cash to poor Kenyan families) as one of its three top charities, above a multitude of organizations that implement other activities in the developing world.

Even when volunteer activities help the beneficiaries, they can hurt others

Consider the case of fundraising for a nonprofit. The activity helps the nonprofit. But what effect does the activity have on other nonprofits? Fundraising might make donors give more in general. But after a certain point, people aren’t willing to give more money to charity. By getting people to give to one nonprofit, you can make them reluctant to give to other nonprofits, reducing their funding.

Consider the case of volunteer tutoring. A lot of what people learn in school is material that they don’t need to know later on in life, so that the primary way in which learning helps is to get them better grades, which helps them get into more prestigious colleges. But there are only a limited number of slots at a prestigious college. So tutoring can have the effect of knocking people out of the running when they don’t have access to quality educational resources.

Volunteering can be costly to nonprofits

According to the report the cost of a volunteer, training and supervising volunteers often costs a nonprofit a lot of money, reducing the resources that it has to use for its activities.

Volunteering is often worse than donating

In Donate Money, Not Time or Stuff Jeff Kaufman points out that to the extent that nonprofits need people to do the work that volunteers do, in cases where the nonprofit could hire someone just as good (or better) than you are for the work for a wage below your earning power, it’s generally better to donate $X than it is to volunteer $X worth of your time.

What to do? 

Learn about economics and effective philanthropy 

In view of the above considerations, finding volunteer activities with high social value can be very tricky. To figure out which ones they are, it helps to

If you do these things sooner rather than later, you’ll be much better positioned to make the most out of your volunteer time. I’d be happy to correspond with high school or college students who are interested in the subjects above.

Consider creating online content that many people can benefit from

One promising area for contributing social value through volunteer work is creating online content. This is because (i) the number of people who can benefit is large (ii) people are seldom willing to pay for online content even when they benefit from it.

By engaging in activities like writing Wikipedia articles on important subjects, you can hope to have a large social impact relative to the impact that a high school student would usually have.

This is only one promising activity, and it won’t be right for everyone: we’re in the process of searching for other promising candidates, and welcome any suggestions.

Build skills to help people later

Learning skills like programming, and writing can situate you better to help people in the future. This is true of high school students in particular, who have the potential to become much more knowledgeable and skilled. The resulting humanitarian benefits can be much larger than the benefits of volunteering now.

Increasing the pool of people with outstanding accomplishments

Cross-posted from Less Wrong

In How can Cognito Mentoring do the most good? I included a section on our potential social value. I want to flesh out what we hope to achieve.

Consider the following people:

  • Scott Alexander. One of Less Wrong’s major contributors, and writes Slate Star Codex. His articles regularly get hundreds of Facebook shares.
  • Bryan Caplan. GMU economist, blogger at EconLog, inspired the creation of Open Borders.
  • Alex K Chen. Quora celebrity who has asked 20k+ questions and ~2k answers. One of our adviseesreported to changing his major based on some of Alex’s Quora answers.
  • Paul Christiano. Shifted away from doing pure math and theoretical computer science exclusively, and has played a major role in the effective altruist community, doing research for GiveWell, MIRI and 80,000 Hours, and is involved in a miscellany of other related projects.
  • Anton Geraschenko, Scott Morrison and David Zureick-Brown. They started MathOverflow, one of the first and largest online communities for academic researchers to discuss research-level questions.
  • Elie Hassenfeld and Holden Karnofsky. Started GiveWell, which moved ~$17 million to its recommended charities last year, with the money moved growing exponentially over time.
  • David Jay. Founded the Asexual Visibility and Education Network which has 70k registered members.
  • Paul Niehaus. An UCSD economist who foundedGiveDirectly. GiveDirectly appears to be much more cost-effective than most charities that work in the developing world. It’s one of GiveWell’s top recommended charities, and is perhaps the first organization of its kind.
  • Richard Rusczyk. Founded Art of Problem Solving, which offers ~50 classes at a given time for high potential math students, and which hosts forums that have 144k registered users.
  • Peter Singer. A philosopher who may be the most pivotal figure behind the animal welfare movement and theeffective altruism movement.
  • Ted Suzman. Cofounded Graffiti Labs while in college, the first product of which of has over 1.5 million monthly users, and is earning to give.
  • Eliezer Yudkowsky. He started MIRI, which could appreciably reduce the risk of extinction from artificial intelligence. He started Less Wrong, which has 8+ million page views per year, has given rise to communities around the world, and which people have described as substantially improving their rationality. He’s writing Harry Potter and the Methods of Rationality (which has high consumptive value and which has raised awareness of MIRI and principles of rationality).

Some of these accomplishments are more impressive than others, but all of them are impressive, and most of the people listed are quite young, and will plausible do more impressive things along similar lines as they get older.
Some common threads that I see in these people are:

  • They’ve all taken an unconventional path, doing something that they would not have done if they were making their decisions by mirroring the behavior of the people around them.
  • They’ve contributed much more than have people of their ability level who take more conventional paths. In some cases, the factor by which the value of their activities has increased is perhaps ~2x, in others it may be more like ~100x.

Unconventionality isn’t necessarily a path to success, and there are plenty of people who adopt unconventional paths and don’t get much done at all, but when executed well, it’s possible to pursue an unconventional path with relatively little risk and high potential upside.

We think that we can enable more people to engage in activities like the ones above. Many of those who are well-suited to them are already engaged in them. But there are others who have most of the relevant traits for whom there are only one or two limiting factors. Some ways in which we think that we can remove the limiting factors are as follows

  • By connecting people with better learning resources and raising awareness of the benefits of learning particular subjects, we can help them pick up relevant subject matter knowledge.
  • By encouraging meta-cognition, we can help people become more goal-oriented, recognizing when their life aspirations may be better served by departing from conventional routes.
  • By raising awareness of the sorts of impactful side projects and entrepreneurial efforts that others can engaged in, we can help them get into the mindset of seeing opportunities, and judging when they’re promising.
  • Through networking, we can help our advisees find collaborators.

According to student feedback we’ve had some success on the first two fronts. We’re continuing such efforts, and are in the process of working on the latter two.

By moving people in the directions suggested above, we hope to tip more people into the high achieving pool that has the above as representative members. We expect that we can enable an average of one additional person per year to get into this achievement range, with the benefits accruing throughout their lives.

Concerning the feasibility of this: The number of people with the requisite traits is not very small. As above, the people on the list have in some cases achieved far out of proportion with their ability, so there are a fair number of people of the same ability level who don’t. So far we’ve had a number of advisees who probably have similar characteristics to people on the list above at the same age. So it’s not necessary to influence a huge number of people to succeed (though we’re casting as wide a net as possible.)

Assuming the estimate here is correct, we get a lower bound on the social value generated by Cognito Mentoring. We have other sources of social value, which we touched on in our earlier post and might elaborate in later posts.

What colleges look for in extracurricular activities

By Jonah Sinick

From High school extracurricular activities: factors to consider

We spoke with admissions officers at Harvard, Yale, University of Chicago, Columbia, Stanford, MIT, Duke, University of Pennsylvania, Dartmouth, Williams, Johns Hopkins, Swarthmore, Brown, Northwestern and Caltech, about how they evaluate student participation in extracurricular activities, for 15 colleges total. We also consulted books and articles, such as Cal Newport’s How to be a High School Superstar.

  • Colleges generally don’t prefer some extracurricular activities over others: Seven of the colleges indicated that the nature of the extracurriculars doesn’t matter, as long as the student shows passion. Two of the colleges indicated that they have a preference for students who are involved in at least some activities with other people. Beyond this, no colleges indicated a preference for some extracurricular activities over others. In general, the colleges indicated that they define “extracurricular activities” very broadly, as anything outside of coursework, which could include work, sports, participation in online communities, etc.
  • Colleges generally prefer depth of involvement over breadth: Six of the colleges indicated that they have no preference for whether students engage in lots of activities or a few activities, as long as they show serious involvement in their activities. Seven of the colleges said that depth matters more than breadth. None expressed a preference for many activities.
  • Commitment can be important: Six of the colleges indicated that continuity of involvement and commitment matters. None said that these things don’t matter.
  • Achievement level can make a difference, but appears to be less important: Five of the colleges indicated that achievement level doesn’t matter as much as depth of involvement. Two of the colleges indicated that higher achievement helps.

How can Cognito Mentoring do the most good?

By Jonah Sinick

Cross-posted from Less Wrong

In late December 2013, I announced that Vipul Naik and I had launched Cognito Mentoring, an advising service for intellectually curious young people.

Vipul Naik and I are aspiring effective altruists, and we started Cognito with a view toward doing the most good. We’ve learned a lot over the past 3 months, and are working on planning what to do next. We’d be very grateful for any feedback on current thinking, which I’ve described below.

Our Mission

Human capital is one of society’s most valuable resources, and school years (ages 5 through 22) are a crucial time period for building human capital. Education is a ~$1 trillion dollar sector, but schools are often dysfunctional institutions, and very little effort goes into helping young people develop as much as possible and to allocate their human capital as well as possible. We want to help optimize young people’s life trajectories. For the time being, we’ve chosen to focus on helping highly intellectually capable young people. Some reasons for this are:

  • Intellectually capable people contribute disproportionate social value (e.g. Bill Gates solved an unsolved mathematics research problem as a sophomore in college; the Google co-founders were computer science graduate students at Stanford), and helping them develop is correspondingly more leveraged.
  • We have deep knowledge of the population.
  • The educational infrastructure is designed for the average student, and the gap between how things are and what would be optimal is greatest for the outliers.
  • By focusing on a subpopulation, we can offer more targeted recommendations.

Some ways in which we aim to help them improve their life trajectories are:

  • Encouraging reflective decision making and meta-cognition: we get them thinking about what they want out of life, and how best to attain it. In this respect, we overlap with CFAR.
  • Highlighting the advantages of learning different subjects to help them decide which ones are most important to learn.
  • Pointing them to the best learning resources available.
  • Helping them find high value extracurricular activities to engage in.
  • Informing them of the advantages and disadvantages of different career choice. In this respect, we overlap with 80,000 Hours (while differing in that our focus is on people who won’t be entering the job market for several years).
  • Connecting them with people who have subject matter knowledge in their academic or professional areas of interest.


We’re primarily targeting high school and college students within the range of intellectual ability of Less Wrongers.

About 75% of respondents to the 2013 Less Wrong Survey who reported SAT scores out of 2400 gave a score of 2130+: this is at the 98th percentile of SAT takers. There are ~40,000 people per grade in that score range in the United States nationwide, so ~320,000 Americans. When one accounts for people at lower percentiles who would benefit, as well as students from other countries, the relevant population is ~1 million.

We’re also well equipped to serve people of younger ages who are highly gifted, and are at a developmental stage where they’re capable of engaging in metacognition and learning high school and college level material. There are perhaps ~200,000 such people worldwide.

Our activities

At the time when we posted in December 2013, we were thinking of focusing on personalized advising, perhaps with a view toward becoming a franchise. Since then, we’ve shifted in the direction of focusing on producing written content. There are two reasons for this:

  • Our advisees have derived most of the value from our generic written content.
  • While  of our advisees have benefited very substantially, the average benefits per person don’t seem to be outsized.

Based on the first point and the size of the target population, if we can produce high quality written content and disseminate it widely, in principle 100k+ people could get a large fraction of the benefit of personalized advising for free.

So far ~70 people have contacted us, including ~40 from Less Wrong (c.f. What we learned about Less Wrong from Cognito Mentoring advising). We corresponded at length with a substantial fraction of them. We’ve taken the advice that we’ve generated and converted it into dozens of articles on our advice wiki, at our Quora blogon Less Wrong and at the Davidson Institute Gifted Issues Discussion Forum. (We’ll be consolidating everything into the wiki eventually: the reason that we’re posting to multiple forums is for outreach purposes and to get feedback.)



Our front page has been getting ~400 page views per week, and our wiki has been getting ~400 page views a week. Our Quora blog has 27 followers. We would like our visibility to increase by 1000x.

We’ve struggled to find avenues by which to disseminate our advice. There seem to be few forums where smart high school students congregate. Those forums and mailing lists that do exist often have strict guidelines against posters promoting their own blogs. We’re grateful that Less Wrong has been welcoming.

We’d appreciate any suggestions for how we might be able to reach more people.

Where will the social value come from?

The main avenues through which people generate social value and disvalue are

  1. Career
  2. Side projects / volunteering
  3. Donating to charity
  4. Enjoying recreational activity, health and wealth
  5. Relations with family and friends
  6. Having children

We have to offer our advisees advice that improves their lives for them to find it worthwhile, but we think that our social impact will be mediated primarily through the impacts of #1 and #2 on others.

It may be surprising that we highlight #2. One reason that we highlight it is that high school and college students tend to have free time outside of school, that they can spend more productively on side projects than on the relatively low-skilled part time jobs that are available to them without the credential of a college degree. Another is that it can be hard to find funding to work on something of high social value full time. Some examples of successful side projects created by members of the effective altruist / Less Wrong communities are:

Why don’t we expect our impact to be through #3 (donating to charity)?

  • A lot of the people well-suited to making money already do it by default: while there are individuals who would do more good taking a higher paying job and earning to give, we wouldn’t expect to be able to boost people’s salaries a lot on average, given the constraints that they operate under, both with respect to skills and with respect to the sorts of work they’d be willing to do.
  • Our advisees won’t be making a lot of money for a long time — by the time they do, they may have had a lot of exposure to the ideas of effective altruism through other channels (whether through existing organizations such as GiveWell and 80,000 Hours, or through future organizations).
  • For effective altruist types, 80,000 Hours Executive Director Benjamin Todd has said that he doesn’t think that it’s plausible that earning to give is likely to be the path toward doing the most good. I gave more points against earning to give as optimal effective altruism in Earning to Give vs. Altruistic Career Choice Revisited.
  • We’re in a different cultural sphere from people in finance and business / consulting, and better suited to help people who are engaged in more intellectual endeavors.

Concerning #4, the benefits would not be leveraged; concerning #5, one would expect the benefits would be ~1x the benefits to the individual, which isn’t a large multiplier; concerning #6, we wouldn’t expect to have much impact on people’s decision to have children, the sign of the effect would be ambiguous, and our advisees are far from the point of actually raising children.

Here are some examples of channels through which we expect to have a positive impact on #1 and #2:

  • There’s a widespread misconception amongst high school students that they have to engage in particular extracurricular activities (or many extracurricular activities) to get into good colleges. By raising awareness that this is not the case, we can free students up to engage in substantive side projects such as contributing to open source software projects and writing Wikipedia articles on important topics — things that both have direct social benefit and that build skills that are useful for future activities.
  • We’re disseminating information about the benefits of computer programming, pointing people to programming learning resources, and pointing people to information about how to learn programming. By reaching high school students, we can help people get a head start, preparing them for the option of becoming software engineers, which will (in expectation) move people into the tech sector, which has unusually great positive externalities.
  • A moderately large fraction of intellectually capable people go to graduate school and end up not using their degrees (e.g. because they’re unable to get jobs in the academic market), or end up doing research of little practical relevance. By disseminating information on academia as a career option and promoting an unbiased view of the value of theoretical research, we can divert people into careers where they can make a difference.
  • By educating people about the unconventional path of entrepreneurship as a career option (for example, by pointing them to entrepreneurship learning resources and connecting them with entrepreneurs who we know) we can enable more people to innovate more than they otherwise would.
We’re very interested in further ideas along these lines, as well as suggestions for how we can realize them.


We originally thought in terms of supporting the operation by charging for personalized advising. This could still be an option, but:

  • High school and college students generally don’t have much money.
  • Most of the students who we advised said that knowing what they know now, they would have sought advising from us only if it were free. This is true even of those who reported to benefiting substantially, suggesting that we can’t resolve the issue by improving the quality of our advice.
  • Students only need ~5 hours of advising from us at a given time, so even to the extent that people are willing to pay, there’s substantial overhead involved per paid hour.
  • While personalized advising does feed into our public content at the current margin, if we had to focus on it heavily, it would distract from producing the more valuable public content.

At this point, we’re seeking philanthropic funding, and would appreciate any ideas as to how to secure it.

Entrepreneurship and college attendance

By Jonah Sinick

Cross-posted from Less Wrong

Some remarks relevant to young aspiring entrepreneurs:

Entrepreneurship and age

• In Why to not not start a startup, venture capitalist Paul Graham says he thinks that the chances of creating a successful startup increase with age up to 23 (at least), but that the best way to gain experience relevant to creating a successful startup is to try creating a startup. He suggests that in unusual cases, 16 year olds may be equipped to create a startup.

Whether or not to go to college

• Going to college (especially an elite college) gives one the opportunity to find cofounders and early employees. Mark Zuckerberg met the early employees of Facebook while at Harvard. Drew Houston met a number of the early Dropbox employees while at MIT.

• It’s rare for highly successful entrepreneurs to not have started college. Sean Parker (Napster founder & venture capitalist) skipped college but was already earning $80k+/year by his senior year of high school, which is very unusual. See also stay mainstream until you have demonstrated success doing unusual stuff.

• The general consensus in the comments on the Hacker News question To go or not to go college? seems to be that even a highly skilled high school programmer should go to college. However, the remarks therein are not directed at entrepreneurs specifically.

Creating a company while in college

• Entrepreneur Nate Berkopec wrote that an aspiring entrepreneur can learn more through starting a business than through coursework, which is very plausible.

• Entrepreneur Jason Baptiste suggests that rather than creating a company while in college, one should instead work on a less time-consuming side project, and see where it leads.

• If one does find a cofounder and has a promising project, there seems to be little harm in taking time off from college to work on a startup. However, unless one is exceptionally talented, the project probably won’t be sufficiently successful so as to furnish a decisive case for not completing a degree.

• In Why to not not start a startup, Paul Graham says that he wouldn’t feel comfortable recommending that somebody with a family do a startup. So all else being equal, one should try earlier in life rather than later in life, and this is an argument in favor of working on something entrepreneurial while in college.