The Influence of Skills and Majors on Future Earnings for German University Graduates
Open Access
- Author:
- Kim-Schmid, Jessica Jessica
- Graduate Program:
- Educational Theory and Policy
- Degree:
- Master of Arts
- Document Type:
- Master Thesis
- Date of Defense:
- March 30, 2020
- Committee Members:
- Maithreyi Gopalan, Thesis Advisor/Co-Advisor
Soo-Yong Byun, Committee Member
Kevin Kinser, Program Head/Chair - Keywords:
- Germany
earnings
labor market outcomes
college major
PIAAC
cognitive skills - Abstract:
- Even though it is well substantiated that higher education can improve students’ earning potential, there is also a well-documented differential in earnings among US college graduates from different majors (Berger, 1988; Carnevale, Cheah & Hanson, 2015). In a study using 2012 Programme for the International Assessment of Adult Competencies (PIAAC) data, Ford and Choi (2018) found that students’ levels of general cognitive skills (i.e., literacy and numeracy) significantly influenced within major heterogeneity in earnings among U.S. college graduates, which adds nuance to the narrative about the relationship between majors and earnings. I build on and extend the Ford and Choi (2018) study by examining whether skills might also mediate the relationship between major and earnings in Germany, a country that uses relatively rigid ability-based tracking in childhood to place students into academic or vocational paths. While general cognitive skills have less of an impact on within-major heterogeneity in earnings in Germany than in the US, the reduced impact is not significant enough to indicate that a different selection mechanism might be at play in the German labor market. It is important to note that this study is descriptive in nature as well, and more research is required to examine whether there is any causal relationship between levels of general cognitive skills and labor market outcomes for university graduates.