College major and female labor supply
This chapter examines how a trend towards gender equality can be leveraged by investigating how the choice of college majors hinders the entry of women into the workforce and how it might be remediated. Beyond enhancing firms’ creativity and absorptive capacity, the entry of women into the workforce helps alleviate the effects of the demographic crisis by replenishing the labor pool. This chapter examines how a factor that is not directly related to gender discrimination, the choice of college major, accounts for about half of the gender gap in earnings and employment. While men are more likely to major in engineering, which offers good career prospects, women are more likely to select humanities and arts/athletics majors that offer poor career prospects. This chapter conducts a thought exercise, to see how nudging women into science, technology, engineering, and mathematics (STEM) fields might increase their workforce participation and earnings, and magnify the benefits gained from the ongoing trend of increased gender equality.