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The Effect of the Business Cycle on Freshman Major Choice

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  • Bradley, Elizabeth S.

Abstract

During economic downturns, college students can alter their postsecondary education decisions through several channels. This paper focuses on college major choice, one higher education decision that might change after a recession, and one that few researchers have explored. Due to data limitations, previous research is unable to provide definitive results on if, or how, matriculating freshmen change college majors during recessions. The data used for this study assuages those limitations and is obtained from the "Freshman Survey," administered by the Cooperative Institutional Research Program (CIRP). Building on what is already known about how students choose college majors and how they respond to information shocks, the theoretical model proposes that during economic downturns, students will switch to fields with higher relative wage and employment opportunities. First, this study finds that freshmen are less likely to have undeclared intended majors after recessions. Then, a multinomial logit empirical technique strongly suggests that after economic downturns, those who declare intended majors are more likely to choose ones that offer higher wages and provide more job security, like Technology, Business, Engineering and Health. University administrators can apply this empirical model to their own institutional-level data. In the presence of substantial budget cuts, administrators can anticipate the majors that will require more resources and those from which they can transfer resources to efficiently meet student demand. More broadly, these conclusions offer better information on labor force composition after recessions, which can enhance forecasting of likely shortages and surpluses in the labor market.

Suggested Citation

  • Bradley, Elizabeth S., 2012. "The Effect of the Business Cycle on Freshman Major Choice," MPRA Paper 42412, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:42412
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    File URL: https://mpra.ub.uni-muenchen.de/42412/1/MPRA_paper_42412.pdf
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    References listed on IDEAS

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    Cited by:

    1. Luc Bridet & Margaret Leighton, 2015. "The Major Decision: Labor Market Implications of the Timing of Specialization in College," Discussion Paper Series, Department of Economics 201510, Department of Economics, University of St. Andrews.
    2. David L. Sjoquist & John V. Winters, 2015. "State Merit Aid Programs and College Major: A Focus on STEM," Journal of Labor Economics, University of Chicago Press, vol. 33(4), pages 973-1006.
    3. Emanuela Ghignoni, 2015. "Family background and university dropouts during the crisis: the case of Italy," Working Papers 169, University of Rome La Sapienza, Department of Public Economics.
    4. Adriana D. Kugler & Catherine H. Tinsley & Olga Ukhaneva, 2017. "Choice of Majors: Are Women Really Different from Men?," NBER Working Papers 23735, National Bureau of Economic Research, Inc.
    5. Goulas, Sofoklis & Megalokonomou, Rigissa, 2015. "The Financial Crisis and the Choice of College Major," MPRA Paper 66001, University Library of Munich, Germany.
    6. Kugler, Adriana & Tinsley, Catherine H. & Ukhaneva, Olga, 2017. "Choice of Majors: Are Women Really Different from Men?," IZA Discussion Papers 10947, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    College major choice; Business Cycles; Higher Education;

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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