The Role of Education-Industry Match in College Earnings Premia

• In Event: Academics, Professional Skills, and Critical Thinking—What Drives Students’ Economic Mobility?

Abstract

While college credentials generally yield earnings premia in the labor market, there is substantial variation, including in returns to even the same credential across workers. One contributor to this variation is whether a worker’s employment is “matched” with their educational training. We leverage a novel education-industry crosswalk applied to student and worker panel data covering over 295,000 graduates to estimate an education-industry match premium that leverages within-person variation in earnings. We document which fields have the most and least education-industry matching, how match premia vary across fields, and how match premia evolve over time. We show that workers in industries “matched” with their associate or bachelor’s degree field experience an average earnings premium of about 7% and 11%, respectively, though these premia vary depending on how long a worker has been working in a matched industry. These findings shed new light on how education, occupation, and industry explain wages and offer important insights for future work and individual investments in higher education.

Author

• Lauren Cathleen Russell, University of Pennsylvania
  Presenting Author