Complementarities in High School and College Investments
joint with John Eric Humphries and Juanna Joensen.

Abstract
This paper studies the complementarities between multi-dimensional abilities, high school investments, and college investments in wages. Using a novel administrative data set from Sweden, the analysis accounts for a rich set of observables; latent cognitive, grit, and interpersonal abilities; high school specialization in vocational, academic, and STEM tracks; and college major choices. First, we provide non-parametric evidence of the strong complementarities between abilities, high school investments and college investments. Second, we estimate a generalized Roy model that accounts for additional unobserved heterogeneity using within-school-across-cohort variation in specialization choices. We find that investing in more challenging tracks in high school increases college enrollment and graduation, but not necessarily wages. For students who do not pursue medicine or engineering in college, specializing in STEM in high school leads to slightly lower wages compared to a more balanced academic track.

Last modified 8/2020