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The Major Decision: Labor Market Implications of the Timing of Specialization in College

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  • Luc Bridet

    () (University of St Andrews)

  • Margaret Leighton

    () (University of St Andrews)

Abstract

College students in the United States choose their major much later than their counterparts in Europe. In this paper we estimate the benefits of flexible specialization: specifically, whether additional years of multi-disciplinary education help students make a better choice of specialization, and at what cost in foregone specialized skills. We first document that students who choose their major later are more likely to change fields on the labor market. We then build and estimate a dynamic model of college education where the optimal timing of specialization reflects a tradeoff between discovering comparative advantage and acquiring occupation-specific skills. Estimates suggest that delaying specialization is informative, although noisy. Working in the field of comparative advantage accounts for up to 20% of a well-matched worker’s earnings. While education is transferable across fields with only a 10% penalty, workers who wish to change fields incur a large, one-time cost. We use these estimates to compare the current system to one which imposes specialization at college entry. In this counterfactual the number of workers who switch fields drops from 24% to 20%; however, comparative advantage-occupation mismatch rises from 23% to 30%, resulting in an overall expected welfare reduction of approximately 1.5% of earnings.

Suggested Citation

  • Luc Bridet & Margaret Leighton, 2015. "The Major Decision: Labor Market Implications of the Timing of Specialization in College," Discussion Paper Series, School of Economics and Finance 201510, School of Economics and Finance, University of St Andrews.
  • Handle: RePEc:san:wpecon:1510
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    References listed on IDEAS

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    Cited by:

    1. Margaret Leighton & Jamin Speer, 2017. "Labor Market Returns to College Major Specificity," Discussion Paper Series, School of Economics and Finance 201709, School of Economics and Finance, University of St Andrews, revised 21 Dec 2017.
    2. Joseph G. Altonji & Peter Arcidiacono & Arnaud Maurel, 2015. "The Analysis of Field Choice in College and Graduate School: Determinants and Wage Effects," NBER Working Papers 21655, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    field of study occupation choice productivity mis-match education higher education specialization general education specialized education;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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