Most importantly, graduates in the arts, psychology and journalism are less likely to create the kinds of innovations that drive economic growth. Economic growth is not a magic totem to which all else must bow, but it is one of the main reasons we subsidize higher education.I think Alex is right; if we’re going to subsidize education, we should subsidize education that generates external benefits for society at large.
The potential wage gains for college graduates go to the graduates — that’s reason enough for students to pursue a college education. We add subsidies to the mix, however, because we believe that education has positive spillover benefits that flow to society. One of the biggest of these benefits is the increase in innovation that highly educated workers theoretically bring to the economy.
As a result, an argument can be made for subsidizing students in fields with potentially large spillovers, such as microbiology, chemical engineering, nuclear physics and computer science. There is little justification for subsidizing sociology, dance and English majors.
But I’m wondering if, in fact, we might already subsidize STEM degrees more than other degrees. Consider the following three factors that make STEM courses more costly to teach:
1. STEM professors are typically paid higher salaries. See, for example, this report from the Chronicle of Higher Education. The last table shows salaries by discipline, as a percentage of the average salary of English professors. Across all disciplines, the average salary is 13.4% higher than an English professor’s. But Engineering professors earn 25.2% more, Computer & Information Sciences 28.4% more. Mathematics is below average at 7.2%, but overall, STEM professors appear to get paid a good bit more than the average. Meanwhile, Fine Arts, Education, Communications, Philosophy, and Psychology are all below the average. (This makes sense, because STEM professors probably have better outside job opportunities and thus a higher opportunity cost.)
2. It’s easier to teach non-STEM courses in large lecture halls, whereas STEM courses often require smaller class sizes to be taught effectively. (I don’t know this with certainty, but I’ve been told as much by university administrators.)
3. When STEM courses are taught in large lecture halls, they require a larger number of teaching assistants to give the students the attention they need. (Again, I don’t know this with certainty, but it’s what I’ve been told.)
Putting 1-3 together, it seems pretty likely that STEM education is more costly to produce. And yet colleges and universities typically charge all students the same tuition regardless of major. True, STEM students may be charged nominal lab fees, but I doubt such fees make a large difference in percentage terms.
So when we consider how much students are charged relative to cost, it looks like STEM students might be getting the larger subsidy. Of course, I don’t know how high the optimal subsidy would be, so it’s possible the current subsidy isn’t large enough.
It’s also worth noting that professors in Law and Business Administration earn the highest pay differentials of all (59.5% and 50.9% above the average English professor), which would imply that these fields are getting among the highest relative subsidies. Econ professors also earn a high differential of 41.2%. Again, this is presumably driven by outside job opportunities. Unless we believe Law, Business Admin, and Econ generate strong positive externalities, maybe we should be charging students more to major in those fields.
Is there some factor I’m missing that would diminish the relative subsidy to STEM (or at least STE) degrees?