Labor Market Outcomes of STEM PhDs: Measuring Career Earnings and Occupation Trajectories

The National Bureau of Economic Research will create a new database to measure the labor market outcomes of STEM PhDs and postdocs. The research will measure flows of STEM graduates into different economic sectors, estimate the returns on educational investments for STEM PhDs and postdocs, and analyze the determinants of STEM labor demand in industry. The study will formulate and estimate new models of labor demand based on state-of-the-art econometric methods and innovative identification strategies using the new longitudinal data created by the project. The research results will produce a feedback mechanism for educators and policymakers on the outcomes of STEM graduates as well as the impact of STEM training on productivity in the economy, thus enhancing the infrastructure to conduct workforce development research. This project is supported by the Education and Human Resources Core Research Program, which funds fundamental research in STEM learning and learning environments, broadening participation in STEM, and STEM workforce development.

The project will construct a new panel data set of PhDs and postdocs containing both detailed demographic and employment information as well as employer information that will allow the researchers to track PhDs and postdocs forward and backward relative to their university training. The project aims to: (1) produce a new longitudinal data set on labor market outcomes of STEM PhD graduates and postdocs; (2) measure the flows of STEM graduates into different sectors of the economy; (3) estimate the returns to education for STEM PhDs and postdocs; and (4) analyze the determinant of STEM labor demand in industry. To achieve these goals researchers will link the Longitudinal Employer-Household Dynamics (LEHD) database to American Community Survey data, and use administrative data from universities to develop and validate machine learning algorithms to identify STEM PhDs and postdocs in the LEHD-ACS. They will also use a combination of databases, including firm and establishment information, and estimating equations to examine the industry demand for STEM workers. The analysis will provide an understanding of exogenous factors that affect the demand for STEM workers. This work will enable researchers to uncover labor market demands for specialized skills and increase the understanding of how university research contributes to the diffusion of new ideas in the economy. Finally, researchers will evaluate the relationship between wages and university-based research training and investigate the extent to which the R&D expenditure and federal research funding intensity of the universities where the STEM worker trained influences earnings and later career prospects.