Specializing in growing sectors: Wage returns and gender differences

Abstract

Matching individual data with national statistics for eight high-income OECD countries, we test whether those who specialized in fields of study when related sectors were growing earn higher wages later in life. We estimate 2-3% higher hourly wages for these individuals compared to others of similar characteristics and abilities who made their specialization choices under comparable macroeconomic conditions but when related sectors were not growing. We then test for heterogeneity in both who chooses fields of study associated with growing sectors, as well as in the wage impacts of doing so. We find that men are less likely to specialize in growing fields because they avoid traditionally female fields that have grown more over recent decades (i.e. health care and education). While for men with at least a bachelor’s degree, specializing in traditionally female fields is associated with lower wages, this is not the case for men with vocational degrees, for whom non-wage factors must drive their reluctance towards female fields. Countries where men are less likely to specialize in growing fields are characterized by more traditional gender norms but also larger reductions in gender wage gaps.