Association for Public Policy Analysis & Management

We test whether specializing in a field of study whose related sectors are growing when individuals are making their specialization decisions matters for future labor market outcomes. To this end, we match data on individuals’ specialization decisions in higher education from PIAAC (Programme for the International Assessment of Adult Competencies) with national statistics from eight high-income OECD countries on the growth in value added of related economic sectors. We find that individuals who choose fields of studies when related sectors are growing at the time of specialization later earn higher wages, report higher job satisfaction, are more likely to be working and to be working in related occupations. We also find for each country that men are overall less likely to specialize in growing sectors. However, our findings are driven entirely by the fact that men do not choose to specialize in traditionally female fields, which have grown more over recent decades (e.g. health, education). For men obtaining a Bachelor’s degree or higher, the avoidance of specializing in traditionally female fields can be explained by lower wages in these fields. However, this is not the case for men obtaining a tertiary vocational (or professional) degree. Their wages in growing female sectors are equivalent to those paid in shrinking male sectors. Hence, the reluctance of men to obtain professional or vocational degrees in growing female fields must be linked to non-monetary aspects such as preferences, social stigma or discrimination. Our results suggest that gendered tendencies in specialization by sectors, paired with growth of sectors related to traditionally female fields could have contributed to narrowing gender wage gaps in recent decades.