Knowledge of earnings risk and major choice: Evidence from an information experiment

Policymakers increasingly seek to inform students about the expected economic returns to different college majors. Less attention has been given to the earnings risk of major choice. In this paper, we use an experiment to study the impact of an information intervention by providing individuals with data that show the earnings risk of a major choice. Our intervention allows us to compare earnings risk and major preferences among a group who is informed about earnings risk compared to a group not given information about risk. Our results show that individuals who see information about earnings risk form different earnings risk estimates and preferences over majors than individuals who see median earnings only. These differences show the negative consequences of making academic major decisions when holding incorrect estimates of earnings risk, and suggest the value of including earnings risk in tools such as college scorecards to inform students.