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Do Students’ College Majors Respond to Changes in Wages?

Mon, April 7, 2:15 to 3:45pm, Convention Center, Floor: Terrace Level, Terrace IV

Abstract

This paper evaluates whether there is a connection between changes in wages by occupation and subsequent changes in the number of college majors completed in fields associated with those occupations. We use both aggregate national data and individual-level data on students in the State of Washington to answer this question. We find statistically significant, although modest, relationships between wages and majors. Wages in year t are most strongly associated with bachelor’s degrees produced in year t+3, which suggests that students’ college major choice decisions respond most to wages when students are (roughly) college sophomores. Majors that have a tight connection to particular occupations see greater shifts in response to changes in their wages.

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