Statistical Discrimination and Optimal Mismatch in College Major Selection

Mary Kate Batistich, Timothy Bond, Sebastian Linde () and Kevin Mumford
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Sebastian Linde: Texas A&M University

No 17237, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We develop a model of college major selection in an environment where firms and students have incomplete information about the student's aptitude. Students must choose from a continuum of majors which differ in their human capital production function and can act as a signal to the market. Whether black students choose more or less difficult majors than similar white students, and whether they receive a higher or lower return to major difficulty, depends on the extent to which employers statistically discriminate. We find strong evidence that statistical discrimination influences major choice using administrative data from several large universities and two nationally representative surveys.

Keywords: mismatch; affirmative action; statistical discrimination (search for similar items in EconPapers)
JEL-codes: I26 J15 J71 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2024-08
New Economics Papers: this item is included in nep-edu and nep-lma
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