The Costs of and Net Returns to College Major

Joseph G. Altonji, Seth D. Zimmerman

Chapter in NBER book Productivity in Higher Education (2019), Caroline M. Hoxby and Kevin Stange, editors (p. 133 - 176)
Conference held May 31–June 1, 2016
Published in November 2019 by University of Chicago Press
© 2019 by the National Bureau of Economic Research

This paper uses administrative student and expenditure data from Florida public universities to describe a) how the cost of producing graduates varies by major, b) how the inclusion of major-specific instructional costs alters the estimated net returns to different fields of study, and c) how major-specific instructional expenditures changed between 1999 and 2013. We find that the cost of producing graduates in the highest cost major (engineering) is roughly double that of producing graduates in low-cost majors, such as business. Cross-major comparisons of per graduate earnings returns net of costs differ from comparisons based on earnings outcomes alone in economically significant ways for a number of fields. Differences between net returns and earnings returns per dollar of instructional spending are even more pronounced. Our analysis of trends in instructional expenditures shows that per credit expenditures for undergraduate classes dropped by 16% in Florida universities between 1999 and 2013. The largest drops occurred in engineering and health, where per credit spending fell by more than 40%. Observed spending changes have little relationship with per credit costs or earnings outcomes.

This chapter is no longer available for free download, since the book has been published. To obtain a copy, you must buy the book.
Order from

Machine-readable bibliographic record - MARC, RIS, BibTeX

This chapter first appeared as NBER working paper w23029, The Costs of and Net Returns to College Major, Joseph G. Altonji, Seth D. Zimmerman
Users who downloaded this chapter also downloaded* these:
De Vlieger, Jacob, and Stange Measuring Instructor Effectiveness in Higher Education
Hoxby and Stange Introduction to "Productivity in Higher Education"
Blinder w1052 On the Monetization of Deficits
Courant and Turner Faculty Deployment in Research Universities
Altonji and Zimmerman w23029 The Costs of and Net Returns to College Major
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us