Wage Differentials by Field of Study--The Case of German University Graduates

Using data on German university graduates, this paper analyzes wage differentials by field of study at labor market entry and five to six years later. At both points of time, graduates from arts/humanities have lower average monthly wages compared to other fields. Blinder-Oaxaca decompositions show that these wage differentials can be explained largely by different job and firm characteristics rather than by individual or study-related characteristics. We also find evidence that the less favorable job and firm characteristics of arts/humanities graduates at labor market entry will persist for (at least) the next five to six years. (Contains 7 tables and 11 notes.)