Major-Occupation Specificity and College Skill Production

Abstract

We propose an easily computable measure called Major-Occupation Specificity (MOS) that captures the latent skills imparted by different college majors. Specifically, we apply the Method of Reflections, which is an iterative algorithm that originated in the context of international trade, to parse a major-to-occupation flow network and formulate a scalar measure of major specificity that is distinct from existing metrics. Empirically, our MOS index appears to be a potent factor in explaining individual earnings and employment differences across college majors, and the results remain robust after considering confounding factors and aggregation issues. Further results suggest that the MOS index can not only account for current income disparities but also predict future major-level earnings growth, a feat beyond the capability of existing major-specificity indices. Additional exercises reveal that the MOS index strongly relates to advanced skills such as critical and analytical thinking, as well as the ability to analyze and solve quantitative, practical, and complex problems.