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Title: The Lifetime Earnings Premia of Different Majors: Correcting for Selection Based on Cognitive, Noncognitive, and Unobserved Factors
Resulting in 1 citation.
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Webber, Douglas A. |
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The Lifetime Earnings Premia of Different Majors: Correcting for Selection Based on Cognitive, Noncognitive, and Unobserved Factors Labour Economics 28 (June 2014): 14-23. Also: http://www.sciencedirect.com/science/article/pii/S0927537114000281 Cohort(s): NLSY79 Publisher: Elsevier Keyword(s): American Community Survey; Cognitive Ability; College Major/Field of Study/Courses; Educational Returns; Noncognitive Skills This paper constructs a simulation approach to estimate the lifetime returns to various college majors. I use data from the 1979 cohort of the National Longitudinal Survey of Youth and American Community Survey to estimate the parameters which form the backbone of the simulation. I address selection into both higher education and specific major categories using measures of cognitive and noncognitive ability. Additionally, I present the lifetime premia under various assumptions regarding the magnitude of unobservable sorting. I find substantial heterogeneity in the returns to each educational outcome, ranging from $700,000 for Arts/Humanities majors to $1.5 million for Science Technology Engineering or Math (STEM) graduates (each premium is relative to high school graduates with no college experience). The differentials are larger when search behavior (allowing for differential unemployment probabilities across majors) is taken into account. Finally, I estimate the major premia separately across three birth cohorts to account for the changing nature of selection into both college and majors over time. |
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Bibliography Citation
Webber, Douglas A. "The Lifetime Earnings Premia of Different Majors: Correcting for Selection Based on Cognitive, Noncognitive, and Unobserved Factors." Labour Economics 28 (June 2014): 14-23.
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