Institution, Major, and Firm-Specific Premia: Evidence from Administrative Data

Ben Ost, Weixiang Pan and Douglas Webber

No 2024-018, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We examine how a student's field of degree and institution attended contribute to the labor market outcomes of young graduates. Administrative panel data that combines student transcripts with matched employer-employee records allow us to provide the first decomposition of premia into individual and firm-specific components. We find that both major and institutional premia are more strongly related to the firm-specific component of wages than the individual-specific component of wages. On average, a student's major is a more important predictor of future wages than the selectivity of the institution attended, but major premia (and their relative ranking) can differ substantially across institutions, suggesting the importance of program-level data for prospective students and their parents.

Keywords: College major; Higher education; Wage decomposition; Returns to institution; Firm effect; College premium (search for similar items in EconPapers)
JEL-codes: I21 I23 I26 (search for similar items in EconPapers)
Pages: 29 p.
Date: 2024-04-09
New Economics Papers: this item is included in nep-lma and nep-ure
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https://www.federalreserve.gov/econres/feds/files/2024018pap.pdf (application/pdf)

Related works:
Working Paper: Institution, Major, and Firm-Specific Premia: Evidence from Administrative Data (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2024-18

DOI: 10.17016/FEDS.2024.018

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