Curriculum choice, educational performance, and wages within STEMaf Lene Kromann, Jeanette Walldorf, & Anders Sørensen

The importance of curriculum choice for subsequent income is studied, using detailed education data from the Master of Science in Engineering program at the Technical University of Denmark (DTU). It is found that there are large differences across areas of specialization within STEM. Compared to graduates specialized in Science (S), graduates specialized in Mathematics (M) have a starting wage that is 20 percent higher, and graduates specialized in Technology (7) have a starting wage that is approximately 15 percent higher; graduates specialized in Engineering (E) have a sirnilar starting wage. Wage variation within the specific education program is of comparable importance to the wage variations between broad types and different lengths of education. Moreover, large variations in wages exist within the four STEM areas, which can be partly explained by course choice. Specifically, courses in M are associated with higher wages in most areas of specialization, which indicates that M is a general-purpose skill. In contrast, S, T and E are to a higher extent specific-purpose skills, as courses in these fields are not associated with higher wages if completed outside the area of specialization. In addition, a higher GPA obtained in the specific program is associated with higher wages. Approximately half of the wage differences can be explained by the industry composition of jobs. Proxies for individual ability, in the form of the course taken and the average GPA from high school, are included in the regressions to control for individual ability.