This paper constructs a simulation approach to estimate the lifetime returns to various college majors. I use data from the 1979 cohort of the National Longitudinal Survery of Youth and American Community Survey to estimate the parameters which form the backbone of the simulation. I address selection into both higher education and specific major categories using measures of both cognitive and noncognitive ability. Additionally, I present the lifetime premia under various assumptions regarding the magnitude of unobservable sorting.
I find substantial heterogeneity in the returns to each educational outcome, ranging from $700,000 for Arts/Humanities majors to $1.5 million for Science Technology Engineering or Math (STEM) graduates (each premium is relative to high school graduates with no college experience). The differentials are larger when search behavior (allowing for differential unemployment spells across majors) is taken into account.