The role of the option value of college attendance in college major choice
Economics of Education Review Volume 17, Number 1 ISSN 0272-7757 Publisher: Elsevier Ltd
In this paper, the analysis of college major choice is extended to include the option value of college attendance represented by the probability of and rewards from graduate school attendance. The results for men indicate that the option value is a significant, positive factor in the choice of liberal arts and science majors and is larger in all majors except computer science/engineering, for those with lower earnings at the undergraduate level. In contrast, while women may receive more after a graduate degree in any major, the option value is only significant in their choice of liberal arts and science majors. [JEL I21, J24]
Eide, E. & Waehrer, G. The role of the option value of college attendance in college major choice. Economics of Education Review, 17(1), 73-82. Elsevier Ltd.