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Liberal Arts: A New Perspective

“What job opportunities will my children have in the future?”

“What job opportunities will I have in the future?”

Questions such as these have been frequently posed to us over the past year in response to the recently released, Ready for What? report. Predicting what the labor market will look like in the near and far future is a popular topic; lately, the predictions have focused on the impact of Artificial Intelligence on careers.

More than an academic exercise, choices by many individuals about one of the largest and most important investments of their lives – their education – are based on these predictions. These predictions matter, especially as the cost of four-year degree programs continues to outpace wage increases. Therefore, it is not only critical that these estimates are accurate, but that they are able to capture the labor market returns for different education and career pathways.

There is a consensus among labor market researchers and policy makers that the best career advice for individuals is to continue their education after high school and to earn a postsecondary credential, preferably a four-year degree. However, in broadening our collective definition of career success beyond a four-year degree, the advice imparted does not reflect the most current research findings and often discounts a still-viable credential: the much-maligned liberal arts degree.

As commonly portrayed, liberal arts degree holders have no definable career path, low lifetime earnings, and little to no skill transferability to growing industries and occupations. Long-held critiques about the labor market value of liberal arts degrees have had a lasting, detrimental impact with students and their decisions about postsecondary education. Benjamin Schmidt’s recent analysis of 2017 IPEDS completion data reveals a significant decline in the number of individuals completing a liberal arts degree since the Great Recession. This downward trend has not stabilized despite an economic recovery and is consistent across races, gender and type of institution.

In other words, the data suggest that the perceived lack of labor market value for liberal arts degrees is manifesting into prospective students voting with their feet.

Do earnings data support such perceptions? The median annual earnings for workers with a bachelor’s degree in liberal arts ($52,000) is significantly higher than for individuals with either an associate’s degree or some college ($40,000) or those with only a high school diploma ($34,000). For the 41% of individuals with a liberal arts degree who also earn a graduate degree, their earnings are 33% higher than those with just a bachelor’s degree.

It is true that, in an absolute sense, liberal arts degree holders don’t earn as much as graduates in STEM, healthcare or business fields. However, by the time workers are in their 30s and early 40s, there is only a very small earnings gap (2%) between liberal arts majors and those with the same degree but with a different major.

But what career pathways are open to those who earn a liberal arts degree? Despite popular anecdotes about the job prospects for holders of liberal arts degrees, most graduates are not forced into positions with little or no room for advancement. Analysis of online resume data has documented several well-defined career pathways for liberal arts graduates transitioning into higher-responsibility, higher-paying roles over time.

In a labor market constantly reshaped by technological change, flexibility of skillsets within and across career sectors is key for both workers and those who would employ them. Skills acquired as part of a liberal arts degree, such as critical thinking and creative problem solving, are transferable to seemingly unrelated, more technical fields. A recent study of LinkedIn data by Alice Ma found that liberal arts graduates outpaced technical graduates in joining the tech sector by 10% between 2010 and 2013, with software development being the third most popular job for recent liberal arts graduates.

The evidence is clear: a liberal arts degree is a viable education option for individuals seeking good long-term wages with strong connections to multiple career pathways across a variety of industry sectors. But what about the future labor market?

According to noted economist, Larry Katz, a broader grounding in multidisciplinary liberal arts can ultimately protect individuals from future job losses due to potential outsourcing or new technology. The critical thinking and creative skills developed in such programs, he argues, cannot be replaced by AI technology but instead will be the main drivers of technological innovation. Integrating and emphasizing such skillsets across education programs is critical for preparing individuals for future jobs.

The value of education in the future labor market will be agnostic to a credential and instead focus on skills. And those that are core to a liberal arts curriculum will be in the greatest demand. From that perspective, the future of the work does not seem as daunting for those interested in a liberal arts education.


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ACT is a mission-driven, nonprofit organization dedicated to helping people achieve education and workplace success. Headquartered in Iowa City, Iowa, ACT is trusted as a leader in college and career readiness, providing high-quality assessments grounded in nearly 60 years of research. ACT offers a uniquely integrated set of solutions designed to provide personalized insights that help individuals succeed from elementary school through career.