Which graduates earn more and which contribute more?

Earnings and productivity varied greatly between STEM and non-STEM graduates. Source: Motu

Students graduating with degrees in science, technology, engineering, or math (STEM) degrees are likely to earn more than their non-STEM counterparts, new research suggests.

But the paper, produced by economic think-tank Motu, also shows non-STEM graduates contribute far more to productivity than their counterparts.

There is a big push by industry and the Government to increase the number of students studying and graduating in STEM subjects.

The thinking is more people are needed in these areas to fuel growth in high-value industries such as the tech sector.

Motu's research looked at 187,395 young graduates split into four groups:
* High STEM graduates with the minimum of a bachelor degree;
* Low STEM graduates with a sub-bachelor qualification;
* High non-STEM graduates with the minimum of a bachelor degree;
* Low non-STEM graduates with a sub-bachelor qualification.

Co-author Dr David Mare found all groups started their careers with relatively high average pay, but high-STEM graduates had both the highest median earnings in the first year after graduation ($45,000) and a relatively high 49 percent growth in median earnings over the first six-years after graduating.

For both STEM and non-STEM graduates with less than a bachelor's degree, earnings started at just over $30,000.

The news keeps on getting better for high-STEM graduates, as their earnings skyrocketed three to six years into their careers compared to other categories.

It was a different story when comparing productivity, however.

"The relative wage paid to high-STEM graduates is around 25 percent higher than their contribution to productivity.

"In contrast, high non-STEM graduates are estimated to make a higher relative contribution to productivity, and their relative wage is lower than their relative productivity by around 34 to 41 percent."

High-STEM graduates were also less likely than other graduates to change jobs, switching 2.9 times on average in the first six years compared to 3.9 times for the average low non-STEM graduate.

The non-STEM group includes high-paid fields such as accountancy and law, alongside lower-paid fields such as creative arts, while STEM includes lower-paid industries such as natural sciences alongside IT.

Mare told Newsroom Pro one of the more interesting findings was the contrast in STEM relative wages and productivity.

"For the productivity stuff the main thing that struck me was that having a degree bachelors or above seems to be a similar productivity contribution and starting salary regardless of whether it's STEM or non-STEM so there's not really a strong case that if you want to have a more productive workforce you've got to go STEM."