Relevance of education to occupation: a new empirical approach based on college courses

Abstract

We introduce a new approach to measuring the match between education and occupation by using the number of college courses related to one's occupation. Previous studies have only considered the match between college "major" and occupation. This approach ignores the content of education and the courses taken in college. We find that taking courses in college that are relevant to one's occupation is significantly associated with higher wages, which can be taken as evidence against the notion that returns to college are principally a matter of signaling. We further find that performing well in these courses is associated with an even higher wage premium. A student's wage increases, on average, by 1.6-2.9 percent for each matched course. This effect increases to 2.3-3.8 percent when we use a grade weighted measure of match.JEL Codes-J24, I26, J62

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

“…Research examining major sorting has found some role for sorting by ability but a larger role for preferences that mathematically able students have toward the subject matter of math‐intensive majors and the more lucrative occupations they are associated with (Arcidiacono, 2004; Hamermesh & Donald, 2008; Webber, 2014). Higher earnings are associated not only with major but also with coursework, indicating that skill levels and not merely credentialing effects are at work (Almasi et al., 2020; Light & Schreiner, 2019).…”