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  3. American Economic Review
  4. May 2014
  5. Trends in Earnings Differentials across College Majors and the Changing Task Composition of Jobs

Trends in Earnings Differentials across College Majors and the Changing Task Composition of Jobs

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Abstract

We show that, among college graduates, earnings differentials across field of study have increased substantially since the early 1990s. We study the degree to which this increase can be accounted for by changes in the labor market return to skills associated with a major. To do so, we define major-specific measures of the relative importance of abstract, routine, and manual tasks on the job, by linking majors to the occupations they typically lead to. Changes in the relationship between earnings and these measures can account for about two-thirds of the rise in inequality.

Citation

Altonji, Joseph G., Lisa B. Kahn, and Jamin D. Speer. 2014. "Trends in Earnings Differentials across College Majors and the Changing Task Composition of Jobs." American Economic Review, 104 (5): 387-93. DOI: 10.1257/aer.104.5.387

Additional Materials

JEL Classification

  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • J31 Wage Level and Structure; Wage Differentials