Long-Run Returns to Field of Study in Secondary School
Gordon Dahl,
Dan-Olof Rooth and
Anders Stenberg
No 13508, IZA Discussion Papers from Institute of Labor Economics (IZA)
Abstract:
This paper studies whether specialized academic fields of study in secondary school, which are common in many countries, affect earnings as an adult. Identification is challenging, because it requires not just quasi-random variation into fields of study, but also an accounting of individuals' next-best alternatives. Our setting is Sweden, where at the end of ninth grade students rank fields of study and admissions to oversubscribed fields is determined based on a student's GPA. We use a regression discontinuity design which allows for different labor market returns for each combination of preferred versus next-best choice, together with nationwide register data for school cohorts from 1977-1991 linked to their earnings as adults. Our analysis yields four main findings. First, Engineering, Natural Science, and Business yield higher earnings relative to most second-best choices, while Social Science and Humanities result in sizable drops, even relative to non-academic vocational programs. Second, the return to completing a field varies substantially as a function of a student's next-best alternative. The magnitudes are often as large as estimates of the return to two years of additional education. Third, the pattern of returns for individuals with different first and second best choices is consistent with comparative advantage for many field choice combinations, while others exhibit either random sorting or comparative disadvantage. Fourth, most of the differences in adult earnings can be attributed to differences in college major and occupation. Taken together, these results highlight that the field choices students make at age 16, when they may have limited information about their skills and the labor market, have effects which last into adulthood.
Keywords: secondary education; comparative advantage; field of study (search for similar items in EconPapers)
JEL-codes: I26 J24 J31 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2020-07
New Economics Papers: this item is included in nep-edu and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Published - published in: American Economic Journal: Applied Economics, 2023, 15 (1), 351-382
Downloads: (external link)
https://docs.iza.org/dp13508.pdf (application/pdf)
Related works:
Working Paper: Long-Run Returns to Field Study in Secondary School (2020) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp13508
Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Access Statistics for this paper
More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().