There’s a Boom in the Economy: Economics Papers on the Sour Prospects of Recent College Graduates in the AI-Age Economy of 2020. Found in Harvard economists Lawrence Katz and Claudia Goldin September 2025 The college wage premium has remained, but has only moved since 2000, while the San Francisco Fed has attributed that stability primarily to lower demand for those workers on paper after some time. The World Economic Forum found earlier this year that AI skills command a 23% wage premium versus just 8% for a bachelor’s degree in isolation. Dallas Fed economist J. Scott Davis may have made the biggest splash with a paper in February 2026 showing that AI is simultaneously undermining entry-level hiring. and Wage growth for experienced workers in the same AI-exposed occupations.
But what about college graduates who deliberately get degrees in supposedly “AI-proof” subjects like psychology or education?
A new report released by the Center for Postsecondary Education and Economic Research maps the projected payoff of a bachelor’s degree. When factoring in the cost of a bachelor’s degree — tuition and fees — some degree holders are actually coming out the other end with negative returns. The worst return is for psychology graduate degrees, a -8% cost-adjusted return, or the estimated change in lifetime earnings after accounting for the cost of attendance.
The report also found that clinical psychology—a specialized branch of psychology—offered a -5% cost-adjusted return. Social work and curriculum and instruction degrees also provide negative returns, according to the study. Other popular degrees, such as computer science, return only 6% after adjusting for costs.
“If you’re thinking about graduate school, you want to get some idea of what the earning potential is with the degree and what kinds of occupations and jobs it leads to,” said Joseph G. Altonzi, a Yale economics professor and co-author of the study. fate.
Over the years, more and more students have hedged their bets on a bachelor’s degree to increase their salary. According to the US Census Bureau, the percentage of Americans with a bachelor’s degree increased from 31% in 1993 to 42% in 2022. But as AI threatens the future of white-collar work, Gen Z, the generation just entering the workforce, is being forced to break traditional work norms as technology sparks white-collar computing.
Research from Anthropic last month found that AI is theoretically capable of performing most tasks in white-collar fields such as engineering, law, and business and finance. As the census suggests, many are still turning to master’s degrees (but a growing number are ditching college altogether). Although AI threatens to take over jobs, some roles considered relatively safe from automation offer little in the way of job security.
