Extra JESS seminar: Labor Market Returns to College Major SpecificityISER Internal Seminars

This paper explores the definition and measurement of college major specificity and estimates its labor market return over a worker’s life cycle. After reviewing the variety of measures which have been used to measure specialization, we propose a new approach: a Gini coefficient based on the transferability of skills across occupations. We calculate and compare representative measures using data from the American Community Survey and the Baccalaureate and Beyond. We then use these measures to estimate the return to specialized higher education. Using our preferred measure, we find that the most “specific” majors are the ones that pay off the most over time. The initial annual earnings premium for the most specific majors is 8%, all of which comes through wages and not hours worked. This premium declines with age but is positive at most ages. General majors, which provide more transferable skills, lag behind. Using a different measure, majors classified as “vocational” enjoy a large early-career premium in earnings, wages, and work hours, but face a later-career earnings penalty.

Presented by:

Margaret Leighton, University of St Andrews

Date & time:

November 9, 2017 1:00 pm - November 9, 2017 2:00 pm


2N2.4.16 - ISER Large Seminar Room

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