Saturday, 21 April 2018

If you're not already studying towards a double major, you should be

For a long time, I've been of the view that for most students, a double major is a better option than a single major. This is for two main reasons. First, it opens more options in terms of employment, especially if the two majors are not strongly overlapping (so accounting and economics, to me, is a better combination than finance and economics). Second, it allows a student to go deep into both disciplines, whereas a single major plus a bunch of disparate electives or a single major alone does not. In the latter case (a single major alone, with minimal electives) may allow extra depth in that discipline, but in many cases there may not be enough course options to only choose a single major (as is the case at Waikato now, where we have substantially curtailed the number of paper options in each major).

Anyway, aside from my own views, is there evidence to support the contention that a double major is better? Yes, there is. A 2008 paper by Alison Del Rossi (St. Lawrence University) and Joni Hersch (Vanderbilt University), published in the journal Economics of Education Review (sorry I don't see an ungated version online), uses data from 66,825 U.S. students in 2003 to answer the question.  They first grouped majors into five groups:
...arts/social science, which includes arts, humanities, social science and other majors; business, which includes economics; education; engineering; and science/math, which includes math, computer science, and science majors.
Then they looked at earnings for single majors, double majors where both majors were in the same group, and double majors where each major was in a different group. Here's what they found:
In the full sample, the results indicate that having a double major significantly increases earnings, with earnings 1.4% higher than for those without a double major. However... the premium for a double major is limited to those whose highest degree is a bachelor’s degree, with a premium of 2.3%. Even though the rate of double majoring is higher among those who achieve graduate degrees, having a double undergraduate major does not increase earnings controlling for level and/or field of the post-bachelor’s degree. The most likely reason is that the highest degree has the primary influence on earnings.
So, a double major is worthwhile (in terms of higher earnings), unless you go on to get a graduate degree (e.g. a Master's degree). Interestingly:
...having an additional bachelor’s degree has no significant effect on earnings, but the returns to graduate degrees are substantial with MBAs and professional degrees having the greatest impact on earnings.
So, in our context, a conjoint degree might not be so worthwhile (as well as those students having a lower odds of completing their double degree). Coming back to majors though, the choice of single major matters:
...majoring in engineering produces the highest return for those with a single major, with a return of about 33%. For those with a bachelor’s degree only, having only one major in business has the next highest return for a single major, 17% higher than a single arts/social science major.
Remember that economics is a business major in this research. And for double majors:
...having two business majors provides returns that are 10 percentage points higher than returns to a single major in business, while those with two education majors have returns that are 5 percentage points higher than those who have a single education major. Aside from those two cases, graduating with one or two majors within the same general area yields about the same relative returns. Notably, having two engineering majors or two science/math majors has no increased return relative to having a single engineering or single science/math major...
The combination of business and science/math has a higher return than either major individually, 10–16 percentage points higher than having a single business major and 11–12 percentage points higher than having a single science/math major for the two subsamples, respectively.
That seems to bode well for students doing economics as part of a double major in a business degree, or combining economics with science or maths. Interestingly, they find similar results for both genders, although:
...females have higher returns than males to engineering and science/math majors, for single majors and most double major combinations including those fields.
Although the U.S. setting is different from New Zealand, Del Rossi and Hersch's paper does provide some suggestive evidence that doing a double major is worthwhile. I may be biased, but I would add that having economics as one of those majors would be an advantage.

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