Efficient Supply of Human Capital: Role of College Major

Sungjin Cho, Jihye Kam and Soohyung Lee ()
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Jihye Kam: University of Wisconsin-Madison
Soohyung Lee: Seoul National University

No 10610, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study examines the extent to which changing the composition of college majors among working-age population may affect the supply of human capital or effective labor supply. We use the South Korean setting, in which the population is rapidly aging, but where, despite their high educational attainment, women and young adults are still weakly attached to the labor market. We find that Engineering majors have an advantage in various outcomes such as likelihood of being in the labor force, being employed, obtaining long-term position, and earnings, while Humanities and Arts/Athletics majors show the worst outcomes. We then conduct a back-of-the-envelope calculation of the impact of the recently proposed policy change to increase the share of Engineering majors by 10 percent starting in 2017. Our calculation suggests that the policy change may have a positive but small impact on labor market outcomes.

Keywords: economics of education; college major; returns to schooling; gender gap; human capital; aging (search for similar items in EconPapers)
JEL-codes: I2 J2 J4 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2017-03
New Economics Papers: this item is included in nep-lma
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Published - published in: Singapore Economic Review, 2018, 63 (5), 1319-1343

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