Is Financial Engineering a STEM degree

STEM popularity in Germany gives cause for optimism

MINT for more productivity and innovation

If many engineers, computer scientists or natural scientists work in a region, innovation increases and other workers in the region also benefit, e.g. B. in the form of higher wages, as research results for the USA show. John V. Winters has examined the external effect of STEM graduates on wages in the same metropolitan area. MINT graduates have a significantly higher positive effect on the wages of other workers than graduates from subjects outside the MINT. Giovanni Peri and co-authors in a 2015 paper come to a similar conclusion: an increase in the number of foreign STEM workers in a region is associated with a significant increase in the wages of university and non-university educated local people. According to the results of Winters in a paper from 2015, the number of STEM graduates also has a positive effect on the number of patents per inhabitant, while non-STEM graduates do not have a positive effect on regions and countries in this way.

STEM studies: flop in the 90s, top (again) since 2000

The call for more STEM students in Germany is understandable, especially in view of the research results for the USA. But how is the popularity of STEM subjects currently in Germany - compared to before and compared to other countries?

Data from the Federal Statistical Office for the period from 1975 to 2017 provide information on the proportion of STEM students in the first semester in relation to all students enrolled in the first semester. In 1989 the proportion of STEM students reached its peak for the time being at 37.3%, before it fell to 29.6% in the 1990s. That was 1997.

At least since the turn of the millennium, the tide has turned. By the 2015/16 winter semester, the proportion of STEM students rose to 40.5% and has remained more or less constant since then. The MINT subjects are again the most popular subject groups among the 878,000 new students at universities. While around 322,000 young people studied economics, social sciences or law in 2017, 351,000 students were trained in MINT subjects.

Historically, the number of new students and the number of MINT freshmen is at a record level - a reason for optimism. But how does it look in an international comparison?

International: high proportion of STEM

The OECD provides data on the proportion of STEM university graduates in its member countries. STEM stands for Science, Technology, Engineering and Mathematics - the English equivalent of MINT. Germany is at the forefront here.

While in the most recent year available in 2016, 36% of all university graduates in Germany came from STEM subjects, in France it was just under 26%. The UK had a STEM graduation rate of 26%, still above the OECD average of 24%. In the US, only 18% of graduates completed their training in a STEM subject. The German STEM rate among students is also good in an international comparison.

Tertiary degree: low percentage of the population

The high proportion of STEM among students in Germany is, however, accompanied by a comparatively low proportion of the population with tertiary education. In 2017, according to OECD data, 31.3% of the 25 to 34-year-olds graduated from a university, technical college or vocational college. The OECD average was significantly higher, at 44.5%. There are therefore a relatively large number of STEM students among Germany's students with a low overall number of students. The disadvantage of the low student rate, however, is less serious than it may appear at first glance, given the usual option in the DACH region for part-time training outside the university landscape. Activities that require university education in other countries are relatively often carried out by people with vocational training in the DACH region.

The German dual training system has proven to be successful in equipping young people in school and at work with skills that allow them to succeed in the labor market - without studying. One can be optimistic that direct involvement in the labor market will help ensure that dual training imparts relevant skills and will remain a model for success, even in a world characterized by faster technological change.

Land of Engineers: Reason for Optimism

The reputation of Germany as the “Land of Engineers” is not entirely undeserved in view of the current record level of MINT subjects. And developments in recent years in particular give cause for optimism. It does not follow from this that an academization of some selected current training occupations and a stronger presence of German research institutions among the world's best would not be desirable. But the findings also do not allow the conclusion that the universities in Germany are not building up the human capital stock necessary for the technological challenges of the future.
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