The Return to College Coursework

• In Event: The Value of College Coursework

Abstract

A growing literature examines the return to college major, showing large differences in labor market outcomes based on one’s field of study. However, the courses one takes to complete a major represent a minority of courses taken in college. Are the returns to college major the dominant way through which courses translate into labor market returns, or are there returns to more broadly to different courses students take in college? Currently, no research examines the return to coursework, especially outside of one’s major.

We provide new evidence on this question using administrative data from the State of Texas that combines K-12 education records with higher education records for all in-state students who attend a public university and quarterly earnings records from the unemployment insurance system. Our data are unique in containing information on every course taken by students as well as the grade received in each class. We estimate selection-on-observable models that control for rich pre-collegiate academic achievement and background characteristics as well as high school and college fixed effects to examine how taking an additional course in one of 14 broad field of study areas affects post-collegiate earnings. We do this both controlling and not controlling for major choice, which allows us to explore the role of non-major course taking. We additionally estimate value-added models that show the variance across classes within different fields of study areas with respect to how they lead to future earnings. Finally, we examine the role of course grades, estimating models that allow the return to coursework to vary by the grade received.

Our results show large variation across different areas of study in the value of coursework, even conditional on major. This is new evidence that college courses outside of one’s major influence future labor market outcomes. We also find large variance in returns within fields: courses differ considerably in their value-added. Finally, we show evidence that on the whole the returns to courses are higher when students perform better, but there is much variation across fields of study in how grades affect the return students experience to the courses they take.

Author

• Scott Imberman, Michigan State University
  Presenting Author