Trade-offs in choosing a college major

Abstract Recent empirical analyses reveal substantial gender differences in the choices of and persistence in college majors, most prominently in significant underrepresentation of women in STEM and other quantitatively oriented fields. Such majors also happen to lead to relatively more lucrative careers; they also tend to feature lower grades. Empirical studies offer competing explanations for this gender imbalance. Some suggest that female students tend to generally exhibit stronger aversion to low grades, hence to low-grading disciplines. Competing evidence suggests that these gender biases are driven by differences in preferences toward pecuniary and non-pecuniary aspects of post-college careers. I develop a theoretical model, which proposes a foundation for the latter explanation as a predominant one and reconciles it with the empirical evidence of gender differences in responsiveness to grades. The paper argues that a student’s responsiveness to grades, in choosing and persisting in a major, is field-specific and is the stronger, the weaker the student’s preferential attachment to it. A key implication is that students who attach high importance to pecuniary benefits of post-college careers will be more tolerant toward inferior grades in their decisions to persist in more lucrative majors. It further explains why such students also tend to drop out of college at higher rates rather than switch to a less lucrative major.