The difference between salaries earned by STEM majors and other college grads is not as stark as once thought, according to researchers at Harvard University.
Graduates with degrees in science, technology, engineering and mathematics (STEM) do get paid more than those with non-STEM degrees, but the difference in pay as a percentage declines over a career, said Kadeem Noray, co-author on the study, “STEM Careers and Technological Change.”
In the long run
The study showed that a typical STEM graduate starts with a salary advantage of 30%, but after 10 years into the job, that advantage dips to 18%. For jobs in applied sciences, such as computer science and engineering, the decline is even steeper than for jobs in the “pure sciences” like biology and chemistry.
The study found that applied science jobs start with a pay premium over non-STEM jobs of 44% at age 24. By age 35, that drops to 14%. In contrast, the fields in the pure sciences such as biology and physics start with a smaller pay premium that grows over a career.
“Tasks change rapidly in STEM. Things you learn on the job, ten years later aren’t relevant,” Noray said. “In [non-STEM] industries, the returns on experience accrue over the years. The tasks don’t change as rapidly, so employees get better at them over time and become more valuable to their employers.”
He said the softening of this advantage over time shows a lower return to experience in STEM fields than others. And that, the researchers argue, means that most of the salary advantage comes from having expertise in a valuable new technology. As others catch up in knowledge of that technology, the salary advantage shrinks.
Although the average STEM major’s income remains higher than the average non-STEM major’s, the percent advantage falls. However, that average salary includes all the STEM majors who left their STEM jobs.
Learn new skills or move on
So what’s a STEM worker to do? Noray recommends they retrain.
“The rise of coding bootcamps, stackable credentials and other attempts at ‘lifelong learning’ can be seen as a market response to anticipated skill obsolescence,” the researchers said.
Nicole Smith, chief economist at Georgetown University Center on Education and the Workforce, who is unaffiliated with the study, said the Harvard study backs up a phenomenon she’s observed in her own research.
“Technology is in such a state of rapid change. There is no such thing as graduation and completion,” Smith said. “Every few years you’re going to have to re-up your education or your certification. You’ll have to prove your competency to stay relevant.”
Lifelong learning looked different 10 years ago, Smith said. She said that before the 2008 recession, it was common for STEM employers to pay for their employees’ graduate degrees.
“Employees were seen as human capital they should invest in,” Smith said. “Through the recession, that stopped. Maybe now with a better economy, that might pick back up.”
When education is unavailable, too expensive, or other opportunities become available, STEM majors take their skills elsewhere, Noray said.
“A lot of people start in STEM and then 8-10 years down the line we find they’re working in something else,” Smith said.
Applied science majors see the fastest exodus, where 88% of 23-year-old applied science majors are in STEM, and by age 50, only 56% remain.
The Harvard researchers also found there is a higher return to younger workers when the rate of change increases, regardless of occupation.
“If our hypothesis is true, that the rate of technological change tends to erode the value of skills over their life, one way of combatting this is to have programs for stem workers to train themselves and learn new skills, Noray said. “Making such programs more prevalent could help.”
Nishant is an editor at Yahoo Finance.