IDEAS home Printed from https://ideas.repec.org/p/fip/fednsr/500.html
   My bibliography  Save this paper

Determinants of college major choice: identification using an information experiment

Author

Listed:
  • Matthew Wiswall
  • Basit Zafar

Abstract

This paper studies the determinants of college major choice using an experimentally generated panel of beliefs, obtained by providing students with information on the true population distribution of various major-specific characteristics. Students logically revise their beliefs in response to the information, and their subjective beliefs about future major choice are associated with beliefs about their own earnings and ability. We estimate a rich model of college major choice using the panel of beliefs data. While expected earnings and perceived ability are a significant determinant of major choice, heterogeneous tastes are the dominant factor in the choice of major. Analyses that ignore the correlation in tastes with earnings expectations inflate the role of earnings in college major choices. We conclude by computing the welfare gains from the information experiment and find positive average welfare gains.

Suggested Citation

  • Matthew Wiswall & Basit Zafar, 2011. "Determinants of college major choice: identification using an information experiment," Staff Reports 500, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednsr:500
    Note: For a published version of this report, see Matthew Wiswall and Basit Zafar, "Determinants of College Major Choice: Identification Using an Information Experiment," Review of Economic Studies 82, no. 2 (April 2015): 791-824.
    as

    Download full text from publisher

    File URL: https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr500.html
    File Function: Full text
    Download Restriction: no

    File URL: https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr500.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gary A. Zarkin, 1985. "Occupational Choice: An Application to the Market for Public School Teachers," The Quarterly Journal of Economics, Oxford University Press, vol. 100(2), pages 409-446.
    2. Arcidiacono, Peter & Hotz, V. Joseph & Kang, Songman, 2012. "Modeling college major choices using elicited measures of expectations and counterfactuals," Journal of Econometrics, Elsevier, vol. 166(1), pages 3-16.
    3. Pierre-André Chiappori & Murat Iyigun & Yoram Weiss, 2009. "Investment in Schooling and the Marriage Market," American Economic Review, American Economic Association, vol. 99(5), pages 1689-1713, December.
    4. Adeline Delavande, 2008. "Pill, Patch, Or Shot? Subjective Expectations And Birth Control Choice," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(3), pages 999-1042, August.
    5. Charles F. Manski, 2004. "Measuring Expectations," Econometrica, Econometric Society, vol. 72(5), pages 1329-1376, September.
    6. Magali Beffy & Denis Fougère & Arnaud Maurel, 2012. "Choosing the Field of Study in Postsecondary Education: Do Expected Earnings Matter?," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 334-347, February.
    7. Eckel, Catherine C. & Grossman, Philip J., 2008. "Differences in the Economic Decisions of Men and Women: Experimental Evidence," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 57, pages 509-519, Elsevier.
    8. Lance Lochner, 2007. "Individual Perceptions of the Criminal Justice System," American Economic Review, American Economic Association, vol. 97(1), pages 444-460, March.
    9. Suqin Ge, 2011. "Women's College Decisions: How Much Does Marriage Matter?," Journal of Labor Economics, University of Chicago Press, vol. 29(4), pages 773-818.
    10. Todd Stinebrickner & Ralph Stinebrickner, 2012. "Learning about Academic Ability and the College Dropout Decision," Journal of Labor Economics, University of Chicago Press, vol. 30(4), pages 707-748.
    11. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1067-1101.
    12. Arcidiacono, Peter, 2004. "Ability sorting and the returns to college major," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 343-375.
    13. Basit Zafar, 2011. "How Do College Students Form Expectations?," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 301-348.
    14. Manski, Charles F., 2002. "Identification of decision rules in experiments on simple games of proposal and response," European Economic Review, Elsevier, vol. 46(4-5), pages 880-891, May.
    15. Todd R. Stinebrickner & Ralph Stinebrickner, 2011. "Math or Science? Using Longitudinal Expectations Data to Examine the Process of Choosing a College Major," NBER Working Papers 16869, National Bureau of Economic Research, Inc.
    16. Montmarquette, Claude & Cannings, Kathy & Mahseredjian, Sophie, 2002. "How do young people choose college majors?," Economics of Education Review, Elsevier, vol. 21(6), pages 543-556, December.
    17. Katja Kaufmann, 2008. "Understanding the Income Gradient in College Attendance in Mexico: The Role of Heterogeneity in Expected Returns to College," Discussion Papers 07-040, Stanford Institute for Economic Policy Research.
    18. Jeanne Lafortune, 2013. "Making Yourself Attractive: Pre-marital Investments and the Returns to Education in the Marriage Market," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 151-178, April.
    19. Asher A. Blass & Saul Lach & Charles F. Manski, 2010. "Using Elicited Choice Probabilities To Estimate Random Utility Models: Preferences For Electricity Reliability," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(2), pages 421-440, May.
    20. Basit Zafar, 2013. "College Major Choice and the Gender Gap," Journal of Human Resources, University of Wisconsin Press, vol. 48(3), pages 545-595.
    21. Eric P. Bettinger & Bridget Terry Long & Philip Oreopoulos & Lisa Sanbonmatsu, 2009. "The Role of Simplification and Information in College Decisions: Results from the H&R Block FAFSA Experiment," NBER Working Papers 15361, National Bureau of Economic Research, Inc.
    22. Mark C. Berger, 1988. "Predicted Future Earnings and Choice of College Major," ILR Review, Cornell University, ILR School, vol. 41(3), pages 418-429, April.
    23. van der Klaauw, Wilbert & Wolpin, Kenneth I., 2008. "Social security and the retirement and savings behavior of low-income households," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 21-42, July.
    24. Siow, Aloysius, 1984. "Occupational Choice under Uncertainty," Econometrica, Econometric Society, vol. 52(3), pages 631-645, May.
    25. Eide, Eric & Waehrer, Geetha, 1998. "The Role of the Option Value of College Attendance in College Major Choice," Economics of Education Review, Elsevier, vol. 17(1), pages 73-82, February.
    26. Julian R. Betts, 1996. "What Do Students Know about Wages? Evidence from a Survey of Undergraduates," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 27-56.
    27. Murat Nick & P. Randall Walsh, 2007. "Building the Family Nest: Premarital Investments, Marriage Markets, and Spousal Allocations," Review of Economic Studies, Oxford University Press, vol. 74(2), pages 507-535.
    28. Robert Jensen, 2010. "The (Perceived) Returns to Education and the Demand for Schooling," The Quarterly Journal of Economics, Oxford University Press, vol. 125(2), pages 515-548.
    29. Sarah E. Turner & William G. Bowen, 1999. "Choice of Major: The Changing (Unchanging) Gender Gap," ILR Review, Cornell University, ILR School, vol. 52(2), pages 289-313, January.
    30. Pencavel, John, 1998. "Assortative Mating by Schooling and the Work Behavior of Wives and Husbands," American Economic Review, American Economic Association, vol. 88(2), pages 326-329, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthew Wiswall & Basit Zafar, 2016. "Human Capital Investments and Expectations about Career and Family," NBER Working Papers 22543, National Bureau of Economic Research, Inc.
    2. Matthew Wiswall & Basit Zafar, 2011. "Belief updating among college students: evidence from experimental variation in information," Staff Reports 516, Federal Reserve Bank of New York.
    3. Arpita Patnaik & Matthew J. Wiswall & Basit Zafar, 2020. "College Majors," NBER Working Papers 27645, National Bureau of Economic Research, Inc.
    4. Delavande, Adeline & Zafar, Basit, 2014. "University choice: the role of expected earnings, non-pecuniary outcomes and financial constraints," ISER Working Paper Series 2014-38, Institute for Social and Economic Research.
    5. Arcidiacono, Peter & Hotz, V. Joseph & Kang, Songman, 2012. "Modeling college major choices using elicited measures of expectations and counterfactuals," Journal of Econometrics, Elsevier, vol. 166(1), pages 3-16.
    6. Ralph Stinebrickner & Todd R. Stinebrickner, 2014. "A Major in Science? Initial Beliefs and Final Outcomes for College Major and Dropout," Review of Economic Studies, Oxford University Press, vol. 81(1), pages 426-472.
    7. Basit Zafar, 2011. "How Do College Students Form Expectations?," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 301-348.
    8. Basit Zafar, 2012. "Double Majors: One For Me, One For The Parents?," Economic Inquiry, Western Economic Association International, vol. 50(2), pages 287-308, April.
    9. Schweri, Juerg & Hartog, Joop, 2017. "Do wage expectations predict college enrollment? Evidence from healthcare," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 135-150.
    10. Shane Thompson, 2017. "College Advising And Gender," Economic Inquiry, Western Economic Association International, vol. 55(2), pages 1007-1016, April.
    11. Lex Borghans & Bart H H Golsteyn & Anders Stenberg, 2015. "Does Expert Advice Improve Educational Choice?," PLOS ONE, Public Library of Science, vol. 10(12), pages 1-28, December.
    12. Todd Stinebrickner & Ralph Stinebrickner, 2012. "Learning about Academic Ability and the College Dropout Decision," Journal of Labor Economics, University of Chicago Press, vol. 30(4), pages 707-748.
    13. 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.
    14. Xia, Xiaoyu, 2016. "Forming wage expectations through learning: Evidence from college major choices," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PA), pages 176-196.
    15. Pamela Giustinelli & Charles F. Manski, 2018. "Survey Measures Of Family Decision Processes For Econometric Analysis Of Schooling Decisions," Economic Inquiry, Western Economic Association International, vol. 56(1), pages 81-99, January.
    16. Matthew Wiswall & Basit Zafar, 2018. "Preference for the Workplace, Investment in Human Capital, and Gender," The Quarterly Journal of Economics, Oxford University Press, vol. 133(1), pages 457-507.
    17. Bradley, Elizabeth S., 2012. "The Effect of the Business Cycle on Freshman Major Choice," MPRA Paper 42412, University Library of Munich, Germany.
    18. 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.
    19. Baker, Rachel & Bettinger, Eric & Jacob, Brian & Marinescu, Ioana, 2018. "The Effect of Labor Market Information on Community College Students’ Major Choice," Economics of Education Review, Elsevier, vol. 65(C), pages 18-30.
    20. O. Poldin & D. Valeeva & M. Yudkevich, 2015. "Choice of specialization: do peers matter?," Applied Economics, Taylor & Francis Journals, vol. 47(44), pages 4728-4740, September.

    More about this item

    Keywords

    college majors; information; subjective expectations; uncertainty;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fednsr:500. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/frbnyus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/frbnyus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.