Earning differences by major field of study: Evidence from three cohorts of recent graduates

Ross Finnie (Department of Economics, Queen's University) and Marc Frenette
Business and Labour Market Analysis
Economics of Education Review,
Volume 22 (2003) pp. 179-192

Context

One of the classic topics in labour economics is the estimation of the returns to education. For the most part this literature has focussed on the returns to the number of years of schooling of the specific level of study. There is strong empirical evidence that – at least in the American context – field of study is an important determinant of graduates' earning levels.

Objectives

The goal of this paper is to report the results of an analysis of differences in earnings by discipline amongst Bachelor's level university graduates in Canada.

Findings

There remain significant gender differences in the distribution of graduates by discipline, with perhaps surprisingly little change in the distributions for the three cohorts which finished their schooling in 1982, 1986 and 1990.

There have been consistent large differences in earnings by discipline amongst Canadian graduates; adding various control variables to the relevant regression models typically reduces the discipline effect but leaves significant differences. These patterns are consistent for male and female graduates, for the two points in time (two and five years after graduation) and for the three cohorts of graduates.

A simple measure of the conditional variability of earnings indicates that the overall conditional variability in earnings has been relatively constant across cohorts while some interesting patterns by discipline are observed.

Data source: National Graduates Survey, 1982, 1986 and 1990.