College majors offer vastly different returns, including different age paths of earnings. Some majors pay off right 
away with good employment outcomes and high earnings, while others take years to fully pay off for their graduates. These differing types of majors seem to be attractive to different types of students.
We find strong and consistent relationships between parental education and students’ major choices. Students whose parents have advanced degrees choose majors that pay off more later in life; they are also less likely to choose safe majors with limited initial downside. These students seem willing to risk having low earnings for years after college in exchange for good jobs and high earnings later in life.
Parental income is less consistently related to major choices. While higher-income students also choose the faster-growth majors, this association is diminished when parents’ education is included as a control, and disappears with the inclusion of institution characteristics. This means that parental income seems to have a robust effect on where people study for college, but not on what they study once they are there. We also show that parental education explains more of the variance in students’ major choices than parental income does.
Both parents’ education and income affect college students’ decisions, likely in complex ways we cannot measure. Disentangling the choice of institution and the choice of major is difficult, because not all types of colleges and universities offer the same set of majors, and some students likely choose their institution based on the available majors, while others likely choose the institution first. While our results are descriptive rather than causal, they provide some insight into how these relationships manifest in students’ decisions. For major choice itself, parental education seems to be the more important factor.
A simple interpretation of our results is that family background, particularly parental education, affects students’ discount factors. Our findings imply that stu- dents whose parents are more educated choose their major in a way consistent with a low discount factor, valuing the future more relative to the present. In contrast, for those students who make it to senior year of college, family income – and related credit constraints – do not seem to be a key determinant of their discounting.
Regardless of the underlying mechanism, our results highlight the long shadow of family background on children’s education. Even for those students who enroll in college, and remain there until senior year, their parents’ income and education continue to influence the labor market value of their educational decisions. Given the importance of college major choice for lifetime earnings, these findings point to a new channel through which outcomes can be related across generations.
Chosen excerpts by Job Market Monitor. Read the whole story @ Rich grad, poor grad: family background and college major choice
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