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Title: Selective Migration, Occupational Choice, and the Wage Returns to College Majors

Citation Type: Conference Paper

Publication Year: 2016

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Abstract: I examine the extent to which the returns to college majors are impacted by selective occupational choice and migration across locations in the U.S. There are large differences across locations in major-specific earnings premiums, migration rates, and propensity to work in related occupations. These spatial differences indicate that selective migration and occupational choice might be an important reason for cross-major earnings variation. To quantify the role of selection, I develop and estimate an extended Roy model of migration, occupational choice, and earnings where individuals choose in which U.S. state to live and in which occupation to work upon completing their education. In order to estimate this high-dimensional choice model, I make use of machine learning methods that allow for model selection and estimation simultaneously in a non-parametric setting. I find that selection in location and occupational choice is an important determinant of earnings differences across majors, but that the magnitude is small. This finding suggests that nonpecuniary preferences associated with post-graduation decisions are important determinants of labor market outcomes.

Url: http://conference.iza.org/conference_files/EcoEdu_2016/ransom_t24155.pdf

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Authors: Ransom, Tyler

Conference Name: 1st IZA Workshop on the Economics of Education: Higher Education

Publisher Location: Bonn, Germany

Data Collections: IPUMS USA

Topics: Education, Labor Force and Occupational Structure, Migration and Immigration

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