(Em)powered by Science? Estimating the Relative Labor Market Returns to Majoring in Science in High School in India

Abstract

Despite widespread belief that majoring in science in high school has a greater payoff in the Indian labor market than majoring in business/humanities, there is no hard evidence to substantiate this thought. Here I provide the first evidence of the causal effect of majoring in science on individuals' labor market outcomes relative to majoring in business/humanities using nationally representative data from India. Estimating the causal effect, however, is a formidable task since selection into high school major is nonrandom and exclusion restrictions are generally unavailable. I circumvent these difficulties by employing a recently developed estimator that does not rely on valid exclusion restriction for identification. I find that majoring in science has a negative causal effect on individuals' employment probability. Conditional on being employed, however, my results indicate that majoring in science has a positive causal effect on individuals' labor earnings and probability of being engaged in a professional occupation. These findings suggest that the labor market effects of majoring in science in high school in India, contrary to conventional wisdom, is not a plain tale of
'science premium'.

Keywords: Earnings, India, High School Major, Science, Selection

JEL Classification: I21, I26, J24, J31