WEO Research Seminar: The Economic Returns to STEM Degrees: Skills or Sorting

Event Date: 20 January 2026

Speaker: Dr Golo Henseke, Associate Professor at the Institute of Education, University College London’s Faculty of Education and Society    

Time: 11:30-12:30 GMT

Location: Online via Zoom

For booking details, please email sbs-weo@strath.ac.uk

Abstract:

Policymakers frequently champion STEM education as a pathway to higher earnings, yet treating STEM as a monolithic category obscures substantial heterogeneity in labour market returns. This paper asks: how much of the earnings premium to STEM degrees reflects portable human capital versus access to high-paying firms. Using linked administrative longitudinal education outcome (LEO) data following all students who completed lower secondary school in England between 2002 and 2006 through university and into the labour market, we estimate subject-specific earnings premia while controlling for prior attainment, A-level and GCSE subject combinations, and school fixed effects. We then apply a Gelbach decomposition to separate portable returns from those mediated by firm sorting. Three findings emerge. First, the "STEM premium" is largely an applied-STEM phenomenon: entering Computer Science, Mathematics, or Engineering is associated with substantial earnings uplift in early career, while Biology, Chemistry and Physics show modest or near-zero returns. Second, firm sorting is central but varies dramatically by field, accounting for over half of the Engineering premium but virtually none of the return to Biology. Third, gender gaps in STEM returns are concentrated in applied fields, with differential firm sorting accounting for roughly a fifth of the Computer Science penalty for women. These results suggest that policies aimed at expanding STEM participation may yield uneven returns, and that access to high-paying employers, not just degree content, shapes who benefits from STEM training.

Published: 5 February 2026