How Does Family Background Influence College Major Choice and Future Earnings?

The study examines how family background influences college major choice and future earnings. Using data from the Higher Education Research Institute (HERI) and the American Community Survey (ACS), the researchers analyze parental education and income effects on major selection and earnings growth. Findings reveal that students with highly educated parents choose majors with lower early-career earnings but higher long-term growth, largely due to eventual graduate school attendance. Parental income has a weaker effect. Students whose parents have graduate degrees are 5 percentage points less likely to choose "safe" majors, and their chosen fields experience 1.7% higher earnings growth.

Full Citation and Link to Article

Leighton, M., & Speer, J. D. (2025). Family Background and College Major Choice: Evidence on Major Earnings Growth. Education Finance and Policy. https://doi.org/10.1162/edfp_a_00448

Extended Summary

Central Research Question

This study investigates how family background influences college major choices and their associated earnings growth. Specifically, it examines the role of parental education and income in shaping students’ decisions regarding majors with different earnings trajectories. The authors aim to understand whether students from different socioeconomic backgrounds prioritize early-career earnings over long-term financial growth and whether these patterns are influenced by the likelihood of attending graduate school.

Previous Literature

The study builds upon existing research that highlights the economic importance of college major selection. Prior literature has established that majors differ significantly in both lifetime earnings and earnings trajectories. Some fields, such as engineering and business, yield high earnings immediately after graduation, while others, such as humanities and social sciences, tend to have lower early-career earnings but stronger long-term growth, often through graduate education.

Research has also explored factors influencing major choice, including expected earnings, social influences, and personal interests. While studies indicate that expected income is a key determinant, non-monetary considerations—such as enjoyment of coursework, parental expectations, and peer influence—also play a role. Previous research has found that students from lower-income families are more likely to prioritize majors with higher early-career earnings, possibly due to financial constraints. Meanwhile, students with more educated parents are more likely to select fields that may have lower initial pay but stronger long-term growth, often requiring graduate degrees.

Despite this existing work, few studies have examined the combined effects of parental education and income on major choice. This paper contributes to the literature by distinguishing between these two factors and analyzing their separate and combined effects on earnings trajectories.

Data

The authors use two primary data sources:

1. Higher Education Research Institute (HERI) Surveys: These surveys contain matched freshman-to-senior responses from approximately 140,000 students between 1994 and 2008, providing detailed information on students' family backgrounds and declared majors. The HERI data also include self-reported parental education and income.

2. American Community Survey (ACS): This dataset includes 7.8 million college graduates from the 2009-2018 period, allowing the authors to estimate average earnings trajectories across different majors. The ACS data provide earnings information across different ages, enabling the researchers to measure both early-career and mid-career income levels.

The HERI data allow for an analysis of how family background shapes major choice, while the ACS data provide information on earnings growth for different majors. The authors merge these datasets to assign earnings trajectories to students based on their selected major.

Methods

The study employs regression analysis to estimate the relationship between family background (parental education and income) and major choice. Three key outcome variables are examined:

1. Lifetime Earnings: The estimated total earnings from ages 20 to 64, calculated using ACS data.

2. Earnings Growth: The percentage increase in earnings from early career (ages 27-30) to mid-career (ages 44-46).

3. Safe Major Selection: Whether a student chooses a major with limited downside risk, defined as fields with high employment stability, low unemployment rates, and relatively strong early-career earnings.

The researchers control for individual characteristics (race, gender, SAT/ACT scores, high school GPA) and institutional factors (college type and selectivity). They also include fixed effects for institutions to ensure that differences in major choice are not simply driven by attending different types of colleges.

To further isolate the effects of parental education and income, the authors conduct robustness checks using alternative measures of family income (e.g., Pell Grant receipt) and replicate their findings in two additional datasets: the National Survey of College Graduates (NSCG) and the National Longitudinal Survey of Youth 1997 (NLSY97).

Findings and Size Effects

Family Background and Major Choice

The findings reveal that parental education plays a more significant role than parental income in determining students’ major choices. Students with more educated parents, particularly those whose parents hold graduate degrees, are more likely to select majors with lower early-career earnings but higher earnings growth. In contrast, parental income has a weaker and less consistent effect on major selection.

Lifetime Earnings

While higher-income parents are associated with students choosing majors with slightly higher lifetime earnings, students whose parents have graduate degrees actually choose majors with 1.6% lower lifetime earnings, controlling for other factors. This counterintuitive result suggests that students from highly educated families may prioritize non-monetary job attributes or be more willing to take initial financial risks for long-term gains.

Earnings Growth

Parental education is strongly correlated with major earnings growth. Students whose parents hold graduate degrees choose majors with earnings growth rates that are 1.7 percentage points higher than those whose parents did not attend college. However, parental income does not significantly predict earnings growth once parental education is controlled for.

To ensure these results are not driven by immediate graduate school plans, the authors divide students into those planning to attend graduate school immediately and those who do not. The relationship between parental education and choosing a high-growth major remains strong in both groups, suggesting that students from highly educated families are willing to accept lower earnings early in their careers even if they do not pursue graduate education right away.

Safe Majors

Parental education also influences the likelihood of selecting a “safe” major. Students whose parents have graduate degrees are 5 percentage points (26%) less likely to choose majors with high early-career employment security compared to those whose parents did not attend college. Parental income, however, does not significantly impact safe major selection.

Graduate School as a Key Factor

A major driver of these findings is the eventual pursuit of graduate degrees. When the authors exclude students who later earn graduate or professional degrees from their earnings growth analysis, the relationship between parental education and major earnings growth disappears. This suggests that students with highly educated parents are comfortable choosing majors with lower early-career earnings because they expect to attend graduate school later and increase their long-term earnings.

Further analysis shows that majors typically associated with medical school (e.g., biology, chemistry) account for about half of the observed effect of parental education on earnings growth. This indicates that students from highly educated families are often selecting majors that serve as stepping stones to lucrative graduate programs.

Conclusion

This study highlights the substantial role of family background in shaping college major choices and earnings outcomes. While both parental education and income influence these decisions, parental education emerges as the stronger predictor of major selection and long-term earnings growth. Students with highly educated parents are more likely to select majors that offer lower early-career earnings but stronger financial returns later, often through graduate education.

The findings suggest that students from different socioeconomic backgrounds face distinct financial trade-offs and expectations regarding future earnings. Those from families with graduate-educated parents may have greater confidence in long-term earnings potential, allowing them to take short-term financial risks. In contrast, students from less-educated families may prioritize financial stability immediately after college, opting for majors with stronger early-career earnings but limited long-term growth.

These results have important implications for education policy and career advising. If students from lower-income or less-educated families are making major choices based on financial constraints rather than long-term potential, targeted interventions—such as improved financial aid or better advising—could help them make more informed decisions. Future research could explore whether providing students with more information about long-term earnings growth and graduate school opportunities alters their major selection patterns.

Ultimately, the study underscores the lasting impact of family background on economic outcomes, illustrating how parental education shapes students’ educational and career trajectories in ways that persist well into their working lives.