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Press Release

College major choice by race and ethnicity; Inflation expectations: Cleveland Fed researchers

Looking at the choice of college majors across racial and ethnic groups, Cleveland Fed researcher finds many similarities and some differences

There are large differences in the average earnings of people who choose different college majors. Could differences in major choice help to explain some of the differences in economic outcomes across demographic groups, such as the lower incomes of blacks and Hispanics relative to whites and Asians? Looking at college major choice across these four groups, Federal Reserve Bank of Cleveland economist Peter Hinrichs finds many similarities and some differences.

Business administration, psychology, nursing, and biology are among the top five majors for all four of the groups, and accounting and political science are among each group’s top ten, says Hinrichs. But economics, finance, and electrical engineering appear on the top-ten list only for Asian students, and social work makes the list only for black students.

It is well known that majors in STEM subjects such as computer science, mathematics, and engineering are associated with high earnings, while majors such as early childhood education and social work are associated with low earnings. According to Hinrichs, about 16 percent of white bachelor’s degree recipients and over 30 percent of Asian students had a major in a STEM subject; the comparable figures for black and Hispanic students were around 11 percent and 14 percent, respectively. Looking at the broad category of public administration and social service professions, Hinrichs found that nearly 4 percent of black students and 2½ percent of Hispanic students major in these subjects, whereas only around 1½ percent of white students and less than 1 percent of Asian students do.

Regarding policies and programs designed to draw students into selected majors, Hinrichs cautions that there are tradeoffs. He notes, for example, that having more STEM majors may come partly at the expense of fewer social work majors. Whether this shift would enhance students’ overall well-being or be best for society as a whole is a difficult question.

Read Racial and Ethnic Differences in College Major Choice

Measures of inflation expectations send mixed signals, say Cleveland Fed researchers

Inflation expectations are an important factor affecting future inflation and one of the variables attended to closely by the Federal Reserve. Looking at trends in various measures of short- and long-term inflation expectations, Federal Reserve Bank of Cleveland researchers Mehmet Pasaogullari and Sara Millington find some mixed signals.

The researchers note declines in the 1-year expectations for CPI inflation and core CPI inflation from the Philadelphia Fed Survey of Professional Forecasters (SPF), which now stand at 1.9 percent, and 1.8 percent, respectively. However, they see no worrying signs of a rapid disinflation. In addition, they say the two most recent 1-year median inflation expectations from the University of Michigan Survey of Consumers (UM) as well as the probabilities for the core CPI ranges for the next year suggest a relatively higher inflation outlook. The UM 1-year median expectation declined from 3.3 percent in July 2014 to 2.5 percent in January 2015, its lowest value since September 2010, but rebounded to a 3.0 percent reading in the March 2015 survey.

Looking at measures of long-term inflation expectations, the researchers say the SPF 10-year CPI inflation expectation has been on a declining trend since 2014:Q1 and stood at 2.1 percent in the 2015:Q1 survey. Two market measures of inflation expectations -- the 10-year TIPS breakeven inflation rate and the 10-year inflation swap rate -- were on a declining trend between mid-summer 2014 and mid-January 2015. These measures increased until early March, then started to recede again, say the researchers. The Federal Reserve Bank of Cleveland 10-year inflation expectation measure declined by 0.4 percent between September 2014 and February 2015, to 1.5 percent. It picked up in March and is now at 1.7 percent.

Read Survey and Market-Based Inflation Expectations

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell,, 513.455.4479