Choosing the Field of Study in Postsecondary Education: Do Expected Earnings Matter?

Magali Beffy, Denis Fougère, Arnaud Maurel
2012 Review of Economics and Statistics  
This paper examines the determinants of the choice of the college major when the length of studies and future earnings are uncertain. We estimate a three-stage schooling decision model, focusing on the effect of expected earnings on major choice. We control for dynamic selection through the use of mixture distributions. Exploiting variations across the French business cycle in the relative returns to the majors, our results yield a very low, though significant, elasticity of major choice to
more » ... major choice to expected earnings. This suggests that at least for the French university context, nonpecuniary factors are a key determinant of schooling choices.
doi:10.1162/rest_a_00212 fatcat:4sm23tzw6bayji2cjtcwmyrqtq