Does the student’ major choice for higher education matter their early career’s earning? Evidence from Vietnam

Student: Nguyễn Hà Đăng Khoa, VNP 26

Supervisor: Dr. Trương Đăng Thụy

Abstract:

This thesis investigates the effect of major choice on students’ earnings after they have graduated. Using Data from the Labor Force Survey 2019, we focus on young graduates who are from 21 to 33 years old. The study applied the Heckman sample selection model which corrects the bias of “omitted variables” for the unobserved factors. The model estimates the earnings equation and explains the decision to participate into the labor market of individuals. Results from the observed earnings equation show that graduates who study in Biology, Agriculture, Law and Education see their earnings after school less than their Engineer & Technology major base group by 8,1%, 12,4%, 12,1% and 6,2%. On the other hand, young graduates in Defense & Security and Creative art & Design gain higher earnings than the base group at 16,5% and 7,0%, respectively.

Keywords: Wage, Heckman selection model
JEL: J31, C24