ILRie

Yaling Xu Does Coursework Matter? Uncovering the Role of Skills in the Returns to College Abstract: The continuing shift of the U.S. economy toward a high-skill base has increased the demand for college-educated workers. To understand how higher education prepares students for this evolving economy, a large body of literature in labor economics has focused on the causes and consequences of college enrollment, institutional selectivity, and major choice. Much less attention has been paid to a key dimension that shapes the skills students acquire in college—coursework. In this paper, I scrape and compile a new dataset of detailed course descriptions from Texas public universities. Using a large language model (GPT-4), I extract the skills students are likely to acquire from each course, focusing on two widely taught and consistently identifiable domains: quantitative and writing. I then link these course-level skill measures to Texas administrative records that track students’ educational histories and quarterly earnings. To estimate the returns to coursework-based skills, I implement an instrumental variables strategy that exploits variation in course offerings across cohorts within the same major. I find substantial early-career earnings returns to coursework-based quantitative skills, but no detectable returns to writing skills. These returns are especially large for underrepresented minority (URM) students and for students in less quantitatively intensive majors, suggesting that expanding access to quantitative coursework within majors may serve as a new lever for narrowing racial earnings gaps.

Daphne Blakey

Senan Hogan Hennessy