Modeling College Major Choices Using Elicited Measures of Expectations and Counterfactuals

31 Pages Posted: 5 Feb 2010 Last revised: 28 Feb 2010

See all articles by V. Joseph Hotz

V. Joseph Hotz

Duke University; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Peter Arcidiacono

Duke University - Department of Economics; National Bureau of Economic Research (NBER)

Songman Kang

Duke University - Trinity College of Arts & Sciences

Multiple version iconThere are 3 versions of this paper

Date Written: January 22, 2010

Abstract

The choice of a college major plays a critical role in determining the future earnings of college graduates. Students make their college major decisions in part due to the future earnings streams associated with the different majors. We survey students about what their expected earnings would be both in the major they have chosen and in counterfactual majors. We also elicit students’ subjective assessments of their abilities in chosen and counterfactual majors. We estimate a model of college major choice that incorporates these subjective expectations and assessments. We show that both expected earnings and students’ abilities in the different majors are important determinants of student’s choice of a college major. We also show that students’ forecast errors with respect to expected earnings in different majors is potentially important, with our estimates suggesting that 7.5% of students would switch majors if they made no forecast errors.

Keywords: Choice of college major, subjective expectations

Suggested Citation

Hotz, V. Joseph and Arcidiacono, Peter and Kang, Songman, Modeling College Major Choices Using Elicited Measures of Expectations and Counterfactuals (January 22, 2010). Economics Research Initiatives at Duke (ERID) Working Paper No. 31, Available at SSRN: https://ssrn.com/abstract=1547287 or http://dx.doi.org/10.2139/ssrn.1547287

V. Joseph Hotz (Contact Author)

Duke University ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708
United States
919-660-1841 (Phone)
919-684-8974 (Fax)

HOME PAGE: http://www.econ.duke.edu/~vjh3

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Peter Arcidiacono

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Songman Kang

Duke University - Trinity College of Arts & Sciences ( email )

Durham, NC 27708-0204
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
136
Abstract Views
1,874
rank
203,796
PlumX Metrics