Panel Paper: Loose Coupling Between Science and Engineering Majors and the Labor Market

Thursday, November 6, 2014 : 1:40 PM
Estancia (Convention Center)

*Names in bold indicate Presenter

Daniel Kuehn, American University
This paper investigates the employment of large shares of science, technology, engineering, and mathematics (STEM) majors in occupations that are not related to their major. Although these occupational mismatches are often interpreted as a waste of valuable STEM talent and training, an alternative possibility is that graduates are selecting into occupations where they have a high comparative advantage. If so, then this implies that there is an ongoing diffusion of STEM skills used throughout the US workforce, for STEM majors that do not work in STEM jobs are not necessarily "leakages" from the pipeline.  Understanding how labor markets allocate STEM talent can also help to arbitrate whether it is appropriate to increase the number of STEM majors as a goal in itself, or whether it might be more advisable to ensure that able students have the financial and institutional supports they need to follow labor market signals into fields exhibiting strong labor demand. This process of selection into occupations that are related and unrelated to a college major on the basis of wage differentials implies that standard wage equations estimating the return to a STEM degree are mis-specified. A switching regression is used to estimate the joint determination of occupation and wages for STEM majors. The paper uses several definitions of an occupation's "relatedness" to a major, and data from the American Community Survey, the 2008/09 Baccalaureate and Beyond, the National Survey of College Graduates, and the National Survey of Recent College Graduates.