Relevant Education

In this paper I propose that higher education generate skills that are more or less relevant in different occupations and industries. If different educational fields have different occupational and industry dependent human capital contribution, I expect to see a higher wage premium for people with a relevant education. The key challenge is to classify which educational fields are relevant for which industries and occupations. To do this I will use the systematic occupational and industry coding in Norway and relate this to the different educational fields and programs. Further, I will also use a purely statistical approach where I measure where candidates are allocated in the Norwegian labor market. Since the Norwegian labor market is characterized by collective wage bargaining, especially in the public sector, I will also analyze how sector interacts with the effect of having a relevant education. To examine these questions I will use rich data from Norwegian public administrative registers covering the entire Norwegian population. Using the longitudinal structure of the data I can look at labor market changes within persons; this will help to account for any selection problem based on individual abilities. Preliminary findings show that having a relevant education is associated with an increase in wages. This premium vary between different educational fields, with the largest wage effect for programs of professional study. The effect of having a relevant education is larger within the private sector, compared to the public sector.