Will Studying Economics Make You Rich? A Regression Discontinuity Analysis of the Returns to College Major

Zachary Bleemer, Aashish Mehta

Research output: Contribution to journalArticlepeer-review

18 Scopus citations

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 languageEnglish (US)
Pages (from-to)1-22
Number of pages22
JournalAmerican Economic Journal: Applied Economics
Volume14
Issue number2
DOIs
StatePublished - Apr 2022
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • General Economics, Econometrics and Finance

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