Relevance of Education to Occupation: A New Empirical Approach Based on College Courses
Sarah M Thomas,
Pooya Almasi and
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Aboozar Hadavand: Johns Hopkins University
No 8ysgz, OSF Preprints from Center for Open Science
We introduce a new approach to measuring the match between education and occupation by using the number of college courses related to one’s occupation. Previous studies have only considered the match between college “major” and occupation. This approach ignores the content of education and the courses taken in college. We find that taking courses in college that are relevant to one’s occupation is significantly associated with higher wages, which can be taken as evidence against the notion that returns to college are principally a matter of signaling. We further find that performing well in these courses is associated with an even higher wage premium. A student’s wage increases, on average, by 1.6–2.9 percent for each matched course. This effect increases to 2.3–3.8 percent when we use a grade weighted measure of match.
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