Will Studying Economics Make You Rich? A Regression Discontinuity Analysis of the Returns to College Major

We investigate the wage return to studying economics by leveraging a policy that prevented students with low introductory grades from declaring the major. Students who barely met the GPA threshold to major in economics earned \$22,000 (46\%) higher annual early-career wages than they would have with their second-choice majors. Access to the economics major shifts students' preferences toward business/finance careers, and about half of the wage return is explained by economics majors working in higher-paying industries. The causal return to majoring in economics is very similar to observational earnings differences in nationally representative data