Saturday, June 28, 2014

College Majors, IQ, and Income

New post by Randy Olson on college majors, IQ, and gender. I encourage all readers to read the whole post, which is quite informative. I did leave a comment on his post to note what seems to be a mistake in the SAT to IQ conversions on the part of one of his sources. This mistake led to a systematic overestimation of average IQs in the various majors. Here is my comment:


"SAT to IQ conversion seems to be off. Here is a good site for SAT to IQ conversions:
The smartest major, physics and astronomy, have an average SAT score of 1270. This seems plausible. However, your source converts that 1270 to an IQ of 133.
As the source I provided above shows, the actual conversion of a 1270 SAT score to IQ should be 128-130 depending on the IQ test you use.
Because this post is about the relative IQs of majors, this doesn’t actually have any impact on your argument. But, it is important to note that it seems there was an error on the part of the source when converting SAT to IQ.
My suspicion is that it has something to do with how they handled selection bias. Of course, I could be wrong.
Overall, though, good post."

I'm interested in how this all relates to the expected income of the various majors. Luckily, Bryan Caplan has already provided some numbers on the wage premium of the various majors. I like Caplan's data because it controls for an important factor: pre existing ability bias. After this control, Caplan finds the wage premium by major to be:

Earnings Compared to H.S. Grads
Major
Males
Females
Electrical engineering
+63%
+72%
Computer Science
+61%
+63%
Mechanical engineering
+61%
+72%
Finance
+61%
+55%
Economics
+60%
+59%
Accounting
+53%
+53%
Mathematics
+53%
+50%
Nursing
+52%
+59%
Chemistry
+48%
+47%
General business
+46%
+46%
Political science/gov't
+46%
+47%
Biology
+44%
+43%
Communications
+37%
+45%
History
+35%
+37%
Sociology
+35%
+36%
Liberal arts
+34%
+36%
English language/lit.
+34%
+37%
Anthro./archaeology
+32%
+36%
Fine Arts
+25%
+29%
General Education
+24%
+30%


Note that this is not a comparison of the average expected income by major. Instead, this is a comparison of how much benefit (in terms of income) is derived from a given major.
Not surprisingly, engineering and computer science have the largest wage premiums. This is followed by economics, finance, and accounting. At the bottom of the list, we see english, fine arts, and general education. 
For once, the data seems to confirm conventional wisdom. STEM and business type degrees really do payoff a lot more than traditional liberal arts degrees.
Another piece of conventional wisdom is that the traditional liberals arts majors are just as smart or smarter than the STEM and business type majors despite the income differences. Here is the link to the SAT scores by major data. As noted above, the SAT to IQ conversion seems to be off, but that applies for all majors, so the relative order and differences between majors in terms of IQ should be correct. Of course, the SAT data should be correct too.
My reading of the chart is that, once again, conventional wisdom is confirmed. Liberal arts students are just as smart as STEM and business type majors. They just would rather study philosophy or english in college and make less money later on in life. At least, that is my theory.
This post was pretty off the cuff and written at 5 AM, so it is by no means organized or well written. But, if anything, I hope I at least exposed some readers to good data on majors, income, and IQ.

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