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Do completed college majors respond to changes in wages?

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  • Long, Mark C.
  • Goldhaber, Dan
  • Huntington-Klein, Nick

Abstract

In an analysis connecting labor market earnings to college major choices, we find statistically significant relationships between changes in wages by occupation and subsequent changes in college majors completed in related fields of college study between 1982 and 2012. College majors (defined at a detailed level) are most strongly related to wages observed three years earlier, when students were college freshmen. The responses to wages vary depending on the extent to which there is a strong mapping of majors into particular occupations. We also find that women, blacks, Hispanics, and students with low test scores are less likely to respond to wage changes. These findings have implications for policy interventions designed to align students’ major choices with labor market demand.

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  • Long, Mark C. & Goldhaber, Dan & Huntington-Klein, Nick, 2015. "Do completed college majors respond to changes in wages?," Economics of Education Review, Elsevier, vol. 49(C), pages 1-14.
    • Handle: RePEc:eee:ecoedu:v:49:y:2015:i:c:p:1-14
    DOI: 10.1016/j.econedurev.2015.07.007
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    4. Di Paolo, Antonio & Tansel, Aysit, 2017. "Analyzing Wage Differentials by Fields of Study: Evidence from Turkey," GLO Discussion Paper Series 91, Global Labor Organization (GLO).
    5. Christopher Avery & Oded Gurantz & Michael Hurwitz & Jonathan Smith, 2018. "Shifting College Majors in Response to Advanced Placement Exam Scores," Journal of Human Resources, University of Wisconsin Press, vol. 53(4), pages 918-956.
    6. Jiang, Xuan, 2018. "Planting the Seeds for Success: Why Women in STEM Do Not Stick in the Field," MPRA Paper 89650, University Library of Munich, Germany.
    7. Ransom, Michael R. & Phipps, Aaron, 2016. "The Changing Occupational Distribution by College Major," IZA Discussion Papers 10193, Institute of Labor Economics (IZA).
    8. Reilly, Patrick A., 2020. "Credit towards graduation: The impact of US bank deregulation on human capital accumulation," The North American Journal of Economics and Finance, Elsevier, vol. 51(C).
    9. Shimeng Liu & Weizeng Sun & John V. Winters, 2019. "Up In Stem, Down In Business: Changing College Major Decisions With The Great Recession," Contemporary Economic Policy, Western Economic Association International, vol. 37(3), pages 476-491, July.
    10. Yanqing Ding & Wei Li & Xin Li & Yinduo Wu & Jin Yang & Xiaoyang Ye, 2021. "Heterogeneous Major Preferences for Extrinsic Incentives: The Effects of Wage Information on the Gender Gap in STEM Major Choice," Research in Higher Education, Springer;Association for Institutional Research, vol. 62(8), pages 1113-1145, December.
    11. Bächli, Mirjam & Tsankova, Teodora, 2020. "Free Movement of Workers and Native Demand for Tertiary Education," Other publications TiSEM 33968781-3521-459e-86c9-f, Tilburg University, School of Economics and Management.
    12. Di Paolo, Antonio & Tansel, Aysit, 2017. "Analyzing Wage Differentials by Fields of Study: Evidence from Turkey," GLO Discussion Paper Series 91, Global Labor Organization (GLO).
    13. Tyler Ransom & John V. Winters, 2021. "Do Foreigners Crowd Natives out of STEM Degrees and Occupations? Evidence from the US Immigration Act of 1990," ILR Review, Cornell University, ILR School, vol. 74(2), pages 321-351, March.
    14. Sieuwerd Gaastra, 2020. "Personal Income Taxation and College Major Choice: A Case Study of the 1986 Tax Reform Act," Public Finance Review, , vol. 48(1), pages 3-42, January.
    15. Joseph G. Altonji & Peter Arcidiacono & Arnaud Maurel, 2015. "The Analysis of Field Choice in College and Graduate School: Determinants and Wage Effects," NBER Working Papers 21655, National Bureau of Economic Research, Inc.
    16. Stephen G. Zimmer, 2023. "Rethinking the role of human Capital in Growth Models," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 36(4), pages 567-588, December.
    17. Ran Abramitzky & Victor Lavy & Maayan Segev, 2019. "The Effect of Changes in the Skill Premium on College Degree Attainment and the Choice of Major," NBER Working Papers 26420, National Bureau of Economic Research, Inc.
    18. Joselynn Hawkins Fountain, 2019. "The Effect of the Gainful Employment Regulatory Uncertainty on Student Enrollment at For-Profit Institutions of Higher Education," Research in Higher Education, Springer;Association for Institutional Research, vol. 60(8), pages 1065-1089, December.
    19. Holzer, Harry J. & Xu, Zeyu, 2019. "Community College Pathways for Disadvantaged Students," IZA Discussion Papers 12319, Institute of Labor Economics (IZA).
    20. Hügle, Dominik, 2020. "Higher education funding in Germany: A distributional lifetime perspective," Discussion Papers 2021/1, Free University Berlin, School of Business & Economics.
    21. Arpita Patnaik & Matthew J. Wiswall & Basit Zafar, 2020. "College Majors," NBER Working Papers 27645, National Bureau of Economic Research, Inc.
    22. Dillender, Marcus & Friedson, Andrew & Gian, Cong & Simon, Kosali, 2019. "Does the healthcare educational market respond to short-run local demand?," Economics of Education Review, Elsevier, vol. 73(C).
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    24. Zhou, Yonghong, 2023. "Influence of political movement on fields of study: Evidence from Hong Kong," European Journal of Political Economy, Elsevier, vol. 79(C).
    25. Han, Luyi & Winters, John V., 2020. "Industry Fluctuations and College Major Choices: Evidence from an Energy Boom and Bust," Economics of Education Review, Elsevier, vol. 77(C).

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    More about this item

    Keywords

    College majors; Occupations; Labor market wages;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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