Abstract
We investigate the wage return to studying economics by leveraging a policy that prevented students with low introductory grades from declaring a major. Students who barely met the grade point average threshold to major in economics earned $22,000 (46 percent) higher annual early-career wages than they would have with their s econd-choice majors. Access to the economics major shifts students' preferences toward business/finance careers, and about half of the wage return is explained by economics majors working in higher-paying industries. The causal return to majoring in economics is very similar to observational earnings differences in nationally representative data.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 1-22 |
| Number of pages | 22 |
| Journal | American Economic Journal: Applied Economics |
| Volume | 14 |
| Issue number | 2 |
| DOIs | |
| State | Published - Apr 2022 |
| Externally published | Yes |
All Science Journal Classification (ASJC) codes
- General Economics, Econometrics and Finance