The Effect of Changes in the Skill Premium on College Degree Attainment and the Choice of Major

Ran Abramitzky, Victor Lavy and Maayan Segev ()

No 26420, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the impact of financial incentives on higher education decisions and the choice of major. We rely on a reform whereby Israeli kibbutzim shifted from their traditional policy of equal sharing to productivity-based wages. We use for identification the staggered implementation of this reform in different kibbutzim. In this setting of very low initial returns to education, we find that the dramatic increase in the rate of return and its sharp variation across fields of study led to a large increase in the probability of receiving a Bachelor degree, especially in STEM fields of study that are expected to yield higher financial returns. For men this increase was largely in computer science and engineering, and for women in biology, chemistry and computer science. Our findings suggest that investment in higher education and the choice of major are responsive to increases in the return to education for both men and women.

JEL-codes: J01 J16 J24 (search for similar items in EconPapers)
Date: 2019-11
New Economics Papers: this item is included in nep-lab
Note: CH DEV ED LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published as Ran Abramitzky & Victor Lavy & Maayan Segev, 2024. "The Effect of Changes in the Skill Premium on College Degree Attainment and the Choice of Major," Journal of Labor Economics, vol 42(1), pages 245-288.

Downloads: (external link)
http://www.nber.org/papers/w26420.pdf (application/pdf)

Related works:
Journal Article: The Effect of Changes in the Skill Premium on College Degree Attainment and the Choice of Major (2024)
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:nbr:nberwo:26420

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w26420

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().