The Contribution of College Majors to Gender and Racial Earnings Differences

Gender and racial/ethnic gaps in labor market earnings remain large, even among college-goers. Cross-gender and race/ethnic differences in choice of and returns to college major are potentially important contributors. Following Texas public high school graduates for up to 20 years through college and the labor market, we assess gender and racial differences in college major choices and the consequences of these choices. Women and underrepresented minorities are less likely than men, Whites, and Asians to major in high earning fields like business, economics, engineering, and computer science, however we also show that they experience lower returns to these majors. Differences in major-specific returns relative to liberal arts explain about one quarter of the gender, White-Black, and White-Hispanic (but not White-Asian) earnings gaps among four-year college students and become larger contributors to earnings gaps than differential major distributions as workers age. We present suggestive evidence that differences in occupation choices within field are a key driver of the differences in returns across groups. The work shines light on the roles that college major choice and returns by gender and race contribute to inequality.