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In a recession, your major matters—or at least it used to

Graduating from college during a recession disrupts people’s early careers—not just their employment prospects, but also their starting salaries—and it can take years to catch up.

Now, research from Yale looks at two new questions: how does a graduate’s choice of major affect earnings in a recession? And how does the recent “Great Recession” compare to downturns in the previous 30 years?

Economists Lisa Kahn of the School of Management, Joseph Altonji ’75, ’75MA, of the economics department, and Jamin Speer ’14PhD examined data covering 1976 to 2011 and 50 different college majors to determine “who bears the brunt” of high unemployment in the entry-level job market.

“Does an engineering student retain his or her roughly 75% earnings advantage above an education major, or even widen it when graduating into a recession?” they ask in their paper, “Cashier or Consultant?”

“Or, does the general lack of opportunity compress these earnings differences?”

The answer: it depends on the recession.

For most of the time period they looked at, “high-earning majors are somewhat sheltered from the negative effects of graduating into a recession,” the authors write. Therefore, the earnings gap between finance and music majors that exists in good times grows larger in bad times.

But in the recent recession, which has been “harsher overall on recent graduates,” the relative advantage of high-skilled majors “has largely disappeared,” they found.

“It looks as though the modern recession is more broad-based, impacting recent college graduates and higher-skilled majors to a greater extent than we found for previous recessions.”


The Yale Alumni Magazine is published by Yale Alumni Publications Inc., an alumni-based nonprofit that is not run by Yale University. Its content does not necessarily reflect the views of the university administration.

Filed under economics, Lisa Kahn, Joseph Altonji, Jamin Speer, School of Management

1 comment

    Debra CHRISTOPOULOS , 9:28pm June 25 2014 | Ico flag Flag as inappropriate

    Appreciated. My husband Yale PhD '10 has felt the pain.

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