College Major Choice: Sorting and Differential Returns to Skills
joint with John Eric Humphries and Juanna Joensen

Abstract
Does the college major premium reflect returns to prior abilities or college education? We decompose the college major premium into labor market returns to multidimensional abilities (grit, interpersonal, and cognitive) and skills learned in college. This allows us to quantify how much of the college major premium is due to sorting on multidimensional abilities and how much is due to the differential labor market value of major-specific skills. We find that sorting on abilities accounts for 10-50% of the college major premium. We also provide novel estimates of complementarities and interaction effects between abilities and skills, since the returns to abilities vary significantly across college majors. We document that 40% of students who enter STEM degrees change major or drop out. We evaluate counterfactual policies to promote STEM degrees, accounting for the fact that many who start STEM degrees do not finish.


A preliminary draft is available upon request.

Last modified 2/2017