Who Benefits from a STEM-Education? Evidence from Switzerland

We estimate heterogeneous returns to a STEM education in Switzerland based on individual-level data, exploiting the regional distribution of relative distances to technical and cantonal universities as a cost factor driving college major choice.

Overall, individuals strongly gain in terms of earnings by graduating from a STEM major, with equally large effects for men and women. Ascending Marginal Treatment Effect curves suggest heterogeneous returns while inverse selection on gains implies that individuals with a higher resistance for a STEM education gain the most, where the latter emerges stronger for men. Eventually, we utilize the recent formation of the University of Lucerne, changing relative distances, to estimate the policy-relevant treatment effect for a counterfactual scenario that this university had been established as a technical one: people shifted into a STEM education significantly gain in terms of earnings, with stronger effects for men.

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