Planting the Seeds for Success: Why Women in STEM Don't Stick in The Field

Women are underrepresented in both STEM college degrees and STEM jobs. Even with a STEM college degree, women are signifcantly less likely to work in a STEM occupation than their male counterparts. This paper investigates whether men and women possess different ability distributions and examines how much the gender gap in major choice and job choice can be explained by gender differences in sorting on abilities. I use Purdue University's administrative data that contains every Purdue student's academic records linked to their first job information. I apply an extended Roy model of unobserved heterogeneity allowing for endogenous choice with two sequential optimizing decisions: the choice between a STEM and non-STEM major and the choice between a STEM and non-STEM job. I find that both abilities are significantly weaker determinants of major choice for women than for men. High-ability women give up $13,000 - $20,000 in annual salary by choosing non-STEM majors. Those non-STEM high-ability women only make up 5.6% of the female sample, but their total gains - had they made the same decision as men - explain about 9.4% of the gender wage gap. Furthermore, the fact that female STEM graduates are less likely to stay in STEM is unrelated to the differences in ability sorting. Instead, home region may be important in women's job decisions; female STEM graduates who return to their home state are more likely to opt out of STEM.