Institution, Major, and Firm-Specific Premia: Evidence from Administrative Data

Abstract

We examine how a student's major and the institution attended contribute to the labor market outcomes of young graduates. Administrative panel data that combine student transcripts with matched employer-employee records allow us to provide the first decomposition of premia into individual and firm-specific components. We find that both major and institutional premia are more strongly related to the firm-specific component of wages than the individual-specific component of wages. On average, a student's major is a more important predictor of future wages than the selectivity of the institution attended, but major premia (and their relative ranking) can differ substantially across institutions, suggesting the importance of program-level data for prospective students and their parents.

Why college majors and selectivity matter: Major groupings, occupation specificity, and job skills

“…We have shown that selectivity level and major interact to shape earnings, but does one have a larger impact than the other? Previous studies on individual state university systems find that major is generally a greater predictor of earnings than the selectivity of the school (Carnevale et al, 2017;Ost et al, 2019). 19 We address the same question using our national sample comprised of schools of varying size and affiliation rather than a single public university system.…”

Unfinished Business? Academic and Labor Market Profile of Adults With Substantial College Credits But No Degree

“…We choose to focus on non-zero wages due to the nature of the VEC data, where we cannot distinguish between individuals who truly have zero earnings versus those with earnings we cannot observe due to being employed by the federal government or an out-of-state employer; self-employed or an independent contract worker; or informal sector employees. In the context of similar UI data from Ohio, Ost et al (2019) estimate that only 32% of individuals in their sample (which include students with at least some college experience) for whom they do not observe employment actually had zero earnings. Still, Scott-Clayton and Wen (2018) find that, unlike bachelor’s degree attainment, there is no significant correlation with interstate mobility among associate degree enrollees and graduates; this finding suggests that our estimates of the gaps between SCND and Graduates are not biased by conditioning on observed employment.…”