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Statistical Discrimination and Optimal Mismatch in College Major Selection

Author

Listed:
  • Batistich, Mary Kate

    (University of Notre Dame)

  • Bond, Timothy N.

    (Purdue University)

  • Linde, Sebastian

    (Texas A&M University)

  • Mumford, Kevin J.

    (Purdue University)

Abstract

We develop a model of college major selection in an environment where firms and students have incomplete information about the student's aptitude. Students must choose from a continuum of majors which differ in their human capital production function and can act as a signal to the market. Whether black students choose more or less difficult majors than similar white students, and whether they receive a higher or lower return to major difficulty, depends on the extent to which employers statistically discriminate. We find strong evidence that statistical discrimination influences major choice using administrative data from several large universities and two nationally representative surveys.

Suggested Citation

  • Batistich, Mary Kate & Bond, Timothy N. & Linde, Sebastian & Mumford, Kevin J., 2024. "Statistical Discrimination and Optimal Mismatch in College Major Selection," IZA Discussion Papers 17237, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17237
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    More about this item

    Keywords

    mismatch; affirmative action; statistical discrimination;
    All these keywords.

    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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