The real economics of choosing a major

Whenever today's college students tell people back home (especially of older generations) about what they’re majoring in, the inevitable response (either direct or implied by snide facial expressions) is usually either “good for you; that’ll really put you on the fast track” or “what are you going to do with that after you graduate?”

For most people whose major is not an obvious moneymaker, a common justification (though certainly not the only one) is moral or philosophical, something along the lines of "life’s too short" or "I’d always regret it." I think a better justification can be found in economics.

Before the mid-20thcentury, conventional economic wisdom said that most people behave as "wealth-maximizers" and, given a choice, would choose the path that gave them the most expected money. But in 1944, two economists, John von Neumann and Oskar Morgenstern, said that people behave instead as "utility-maximizers" and will, in many cases, sacrifice wealth (present or potential) for other things that make them happier. Modern economists have since found exceptions to this rule, where rational actors do things that don’t maximize their utility. But even so, post-WWII economics tells us that if people behave as "utility-maximizers" instead of "wealth-maximizers" —which, in the case of choosing a college major, I believe most people do —then they will choose the major and subsequent career that they believe will make them "happiest," whatever that personally means to them.

In picking a college major, most millennials seem to have adopted the von Neumann-Morgenstern model of economic value, whereas most of their parents and grandparents have retained the older, finance-based definition. Both are justifiable, as some level of financial success is an important and necessary consideration for everyone, but I believe that, in this case, happiness-maximization should be prioritized beyond that arbitrarily defined level.

We should encourage people to choose their majors based on the newer model, instead of forcing an antiquated definition of "success" onto everyone facing this life decision.

People fundamentally value different things. If you value money the most, which is totally understandable and does not need to be apologized for, then pursuing a career based on its expected financial return is logical and proper for you. But many of us place a higher value on other things. Anyone who has taken high-school English classes has been conditioned to value intellectual satisfaction, moral success or familial happiness. I don’t disagree that these are worthy aims; I simply believe that there are others that are equally noble, or at least equally rational. As someone who is considering politics as a career, it could be said that I most value power, influence, advancing my moral goals, advocating for others or a variety of more cynical things. Different people have different goals and want different things, and money doesn’t have to be the top priority for everyone.

This system is self-correcting as well: Everyone’s utility at some level depends upon money, and as their wealth approaches zero, they prioritize it more. This means that most people, if they take the financial "risk" of pursuing a so-called "impractical" major and despite attaining their own definition of success are completely poor, will "self-correct" out of necessity and try to make more money. At some self-determined level of being "backed into a corner" financially, everyone will, out of sheer necessity, do something to bring themselves more income, even if that means sacrificing some level of happiness in other areas. I don’t necessarily mean a complete career change; take, for example, a politics major. If he repeatedly runs for elected office —say, on a local level —and never wins, he may well decide to look for work in marketing or political consulting, even if that’s not exactly what he wants to be doing.

Given enough negative incentive, people may not change what qualifications they have, but they probably will change what they do with them. I don’t think that most people have such stubborn drives that they’d rather be completely indigent than compromise their goals even one bit.

I understand that it is not a perfect world, and many people can’t simply make a job change whenever they want. But given the educational opportunities we’ve been fortunate enough to receive, a change is usually possible in some way or another. Realistically speaking, most people will not graduate from Princeton into permanent abject poverty.

What all of this means is that parents sending their children to Princeton should probably stop worrying —or at least worry less —about their son’s or daughter’s financial success afterward. Everyone can define success in their own way, and who are we to stop them from or judge them for pursuing it, especially provided a "safety net" of self-correction? If success to you is money, go for it. If it’s influence, charity, artistic exploration or intellectual achievement, go for it. Act in your own self-interest, but, at the very least, allow yourself to define what that self-interest is.

Ryan Dukeman is a freshman from Westwood, Mass. He can be reached at rdukeman@princeton.edu.