Financial and Monetary Systems

The surprising link between the 2008 financial crisis and US college students

Graduating students line up for the 366th Commencement Exercises at Harvard University in Cambridge, Massachusetts, U.S., May 25, 2017.   REUTERS/Brian Snyder

A shift away from the humanities towards job-oriented degrees. Image: REUTERS/Brian Snyder

Dan Kopf
Reporter, Quartz
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Ten years have passed since the 2008 financial crisis, and the effects linger. For one thing, the crisis produced a significant shift in American higher education. Scared by a seemingly treacherous labor market, since the downturn college students have turned away from the humanities and towards job-oriented degrees.

It’s not clear they are making the right decision.

The humanities were humming along prior to 2008, according to an analysis by the Northeastern University historian Benjamin Schmidt. Over the previous decade, disciplines like history, philosophy, English literature, and religion were either growing or holding steady as a share of all college majors. But in the decade after the financial crisis, all of these majors took a nosedive.

The popularity of the history major is an illustrative example. From 1998 to 2007, the share of college students graduating with a degree in history averaged around 2%. By 2017, it had fallen closer to 1%. (All data in this article are based on reports that colleges submit to the US Department of Education.)

Image: Atlas

Other humanities majors saw a similar fall. “Declines have hit almost every field in the humanities… and related social sciences,” wrote Schmidt in the The Atlantic. “[T]hey have not stabilized with the economic recovery, and they appear to reflect a new set of student priorities, which are being formed even before they see the inside of a college classroom.”

Image: Atlas

What’s replacing the humanities? Mostly, majors with a very clear career path. Of the 20 majors with over 25,000 graduates in 2017, by far the fastest growing was exercise science, followed by nursing, other health and medical degrees, and computer science.

In his research, Schmidt considered whether the increase in professionally focused degrees, and the fall of humanities, could be a result of the changing demographics of who attends college, rather than the result of the financial crisis. Increasingly, college attendees are more likely to be women, and a larger share of Americans from poorer families attend college. Perhaps it was these changes that explain the shift in preferred majors? It wasn’t. Schmidt found that the trend appears in nearly every group he looked at, including students at elite universities like Harvard and Princeton, where the humanities have historically flourished.

Image: Atlas

The decision by many students to turn towards a major that gives them clearer professional skills is understandable. A nursing degree is likely to provide a more stable income after graduation, making college loan payments more manageable.

But for many students, the turn away from the humanities may not pay off. As Schmidt points out, humanities majors don’t make much less than people who choose to study computer science and finance, and the differences are probably less about the chosen major than that the person who studies finance tends to be more interested in making a lot of money. Also, if the tech bubble bursts, computer science may even be riskier than a humanities degree, which gives graduates a broader set of knowledge.

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Just as the 2008 financial crisis turned Americans away from the humanities, it is possible that the Trump era will bring them back. Amy Wang wrote in Quartz that the “historic” nature of the Trump presidency has stoked a renewed interest in history classes, leading the discipline to return to the top of declared majors for students at Yale. Although the US economy is stable, since the political climate is so turbulent the humanities may be more needed than ever to make sense of it all.

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Financial and Monetary SystemsEducation and Skills
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