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

Zachary Bleemer () and Aashish Mehta

American Economic Journal: Applied Economics, 2022, vol. 14, issue 2, 1-22

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 second-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.

JEL-codes: A22 I26 J24 J31 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (25)

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DOI: 10.1257/app.20200447

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