College Majors and the Wage Gap: Understanding Female Choices

Since 1981, women have made up a majority of college-educated American adults, and college-educated women appear on track (pending final 2019 figures) to outnumber college-educated men in the workforce for the first time ever. 

The gender wage gap, however, still persists.  The gap has long been attributed to women’s choice of career and fertility plans, and while it is true industries that employ mostly women tend to pay less than fields dominated by men, there are other factors, such as choice of college major, that play a role in setting the stage for an unevenly compensated workforce.

By linking what undergraduate majors people choose and ensuing labor market outcomes, Carolyn Sloane, Erik Hurst and Dan Black, professor at the University of Chicago Harris School of Public Policy, attempt to provide new insight into the age-old question: why aren’t women paid their fair share?

In their new working paper, Black, Sloane, and Hurst assert that while the gender gap in certain choices of major has declined over time (for example, the engineering major contained twenty men for every one woman in the cohort born in the 1950s, but by the time women born in the 1990s were matriculating, there were five men for every one woman), a large gender gap in what majors people are choosing still exists.  Engineering is still a largely male-dominated major and field despite the lessening gap in majors.

Still, this gender gap in major choice (also referred to by the authors as pre-labor market specialization) has strong predictive power in explaining gender wage gaps independent of occupation choice.

“I've always been extremely interested in the economics of discrimination, both race based and gender based,” Black said. “I can tell you a story where women just hate engineering, so they don't go into engineering. I could also tell you a story where that's completely wrong and what really happens is they look at it and say, ‘Gee, if I go into a male-dominated field like engineering, there are going to be at least some sexist pigs who are going to make my life hell. And so I don't want to major in engineering.’ Those two stories are very hard to disentangle.”

It's hard to empirically measure sexism with data, as it, in recent times, often hides underneath the surface. Without sexism being openly admitted, or even always conscious, Black says there is what he calls a “mystery factor” of sexism in the data. Attempts to quantify the impact of sexism, and document how, if at all, sexism underlies (or addles) the data is a persistent obstacle for researchers of the economics of discrimination. 

“Why have we seen women moving into fields as disparate as pharmacy, accounting, biology — in fact, becoming the majority of graduates for those fields of study — and not seeing them make as much progress in disciplines, such as engineering, computer science and economics?” Black asks. “If we were having this conversation 30 years ago, we might have talked about the math performance of women limiting their entry into these technical fields. But now, it’s established that women are better prepared in math than men on average.” 

The paper, “A Cross-Cohort Analysis of Human Capital Specialization and the College Gender Wage Gap,” was written in collaboration with Sloane, recently a visiting Assistant Professor at the Harris School of Public Policy, and Hurst, the V. Duane Rath Professor of Economics and the John E. Jeuck Faculty Fellow at the University of Chicago Booth School of Business, as well as the Deputy Director of the Becker Friedman Institute for Economics.

Utilizing previously unanalyzed data from the American Community Survey (ACS), which added questions starting in 2009 on pre-labor market specialization, namely the choice of a major, for millions of college-educated individuals, Black, Sloane and Hurst are able to measure “the impact of pre-market human capital specialization on gender wage gaps among the highly-educated across cohorts,” as summarized in their paper. 

The authors begin by showing evidence of a gender convergence in college major choice over the last 40 years, meaning that the gap between men and women’s enrollment in certain majors, specifically ones previously dominated by male students, is shrinking. 

Gender convergence in the engineering major is one example of this, but similar convergence has occurred in the physical sciences (e.g., chemistry, physics, astronomy) and for the biology and life sciences majors (e.g., biology, molecular biology, genetics, ecology). “In fact, biology/life sciences switched from being a major field dominated by men (for the 1950-1970 birth cohorts) to one dominated by women (the 1980-1990 birth cohorts),” the authors write.

However, the authors go on to demonstrate that despite convergence in some fields, women today still tend to choose college majors with lower potential wages than men and that women systemically choose lower potential wage occupations and lower potential hours-worked occupations than men, regardless of major. 

It’s encouraging to note that the authors document this gap narrowing over time. 

“For example, for the 1950 birth cohort, women who majored in engineering chose subsequent occupations with potential wages that were 14 percent lower than men from their cohort who majored in engineering,” the paper states. “For the 1990 birth cohort, however, women who majored in engineering ended up working in occupations with roughly the same potential wages as men who majored in engineering.”

“I can tell you a story where women just hate engineering, so they don't go into engineering. I could also tell you a story where that's completely wrong and what really happens is they look at it and say, ‘Gee, if I go into a male-dominated field like engineering, there are going to be at least some sexist pigs who are going to make my life hell. And so I don't want to major in engineering.’ Those two stories are very hard to disentangle.” - Professor Dan Black

The authors show that college major choice has strong predictive power in explaining gender wage gaps independent of what occupations men and women choose, and have developed a new index that measures the potential wage gap between women and men based on what majors they’ve chosen.

“Campuses have a lot of women relative to men,” Black said. “I think firms have got to get ready for the new era. You're going to have a lot of talented people that are quote ‘the wrong gender’ by [the firms’] own standards. Keeping these women in the workforce and working is going to be very important.”