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Ability Sorting and the Returns to College Major

  • Arcidiacono, Peter

Large earnings and ability differences exist across majors. This paper seeks to estimate the monetary returns to particular majors as well as find the causes of the ability sorting across majors. In order to accomplish this, I estimate a dynamic model of college and major choice. Even after controlling for selection, large earnings premiums exist for certain majors. Differences in monetary returns explain little of the ability sorting across majors; virtually all ability sorting is because of preferences for particular majors in college and the workplace, with the former being larger than the latter.

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Paper provided by Duke University, Department of Economics in its series Working Papers with number 02-26.

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Date of creation: 2002
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Handle: RePEc:duk:dukeec:02-26
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  10. Linda Datcher Loury, 1997. "The gender gap among college-educated workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(4), pages 580-593, July.
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  15. Zvi Eckstein & Kenneth I. Wolpin, 1999. "Why Youths Drop Out of High School: The Impact of Preferences, Opportunities, and Abilities," Econometrica, Econometric Society, vol. 67(6), pages 1295-1340, November.
  16. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts," NBER Working Papers 6385, National Bureau of Economic Research, Inc.
  17. Peter Arcidiacono & John Bailey Jones, 2003. "Finite Mixture Distributions, Sequential Likelihood and the EM Algorithm," Econometrica, Econometric Society, vol. 71(3), pages 933-946, 05.
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  20. Stephen V. Cameron & James J. Heckman, 2001. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 455-499, June.
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