EFFECT OF DOUBLE COLLEGE MAJOR (DEGREE) ON EARNING IN LAO PDR

Abstract

There are few studies on the effect of double major (degree) and most studies concentrate on high income countries (Russell, Dolnicar, & Ayoub, 2008; Del Rossi & Hersch, 2008). These studies have found the positive relationship between double major and employment as well as earning in Australia, Singapore, and U.S. A growing number of Laos students pursue double major. However, double major (degree) actually gives graduates greater employment opportunities and earning than single major graduates has not been fully understood.

This study aims at examining the effects of double major (degree) on earning in Lao PDR. Based on Human capital theory that schooling is the main investment in human capital and playing an important role on individual future earning, through Mincer earning equations have been estimated for the Ordinary Least Square (OLS). And, data of Laos, individuals aged 15-64 years who are urban residents, which are made available by World Bank Skills Towards Employability and Productivity (STEP) Measurement program 2012, that is the labor market skills data collection. The results show that double major graduates earn 8% more, but it is statistically insignificant. Here, double majors do not affect individual earnings. One possible reason is that skill might not be the key factor to setting the pay in Lao PDR. Through statistically insignificant, double major in social science/education relate positively to earning, which is consistent with earlier results. There is only those with college/university degree double major in social science/education is statistically significant higher earning. It reflects that the combinations within the same or related fields higher the earning. Education, work experience and place of residence statistically significantly affect individual earnings, which is conceptually a function of human capital investment.

Moreover, with reference to agriculture, arts/humanities as well as business/economics are statistically significant earn more. These two majors are general in nature, they are always in labor market demand, as they practical to many sectors. In addition, gender difference does not affect individual earnings, especially, those who are highly educated. It seems that discrimination in the educated labor market is absent. Both males and females are very productive, so they receive better job offers and higher pays, regardless of their gender. Similarly, marital status does not affect individual earning, either. It could be due to the higher share of married workers, and productivity of both married and non-married are equally good.

It is recommended that, Laos government should place the top priority to higher education. Ministry of Education and Sports should strongly encourage students to pursue higher education by providing higher education basic information, namely, higher education institutions, admission, and its returns directly to students. Government should give direct grants to students, especially, those who from low-income families and remote areas. And there should be more scholarships for majors that give high returns (arts/humanities and business/economics) and majors that highly demanded (engineering). In addition, the academic consulting offices should be established in provincial public high schools and the academic consultant office should always coordinate with Ministry of Labour and Social welfare for the lastest labor market demand. Higher education administrators should discourage students from pursuing double majors by introducing tough conditions for those who seek double major.