Artificial Intelligence and College Major Choice

Abstract

This paper studies how the diffusion of artificial intelligence reshapes human capital investment and local labor market outcomes. Using Lightcast job postings and American Community Survey data, we construct location-level AI labor demand shocks and identify their effects with a shift-share IV design. Higher AI demand reallocates college majors toward AI-adjacent fields—especially computer science and engineering—and away from education and humanities. Dynamic estimates show persistent relative gains in these AI-adjacent STEM fields and relative declines in humanities, business and economics after 4 years. On the extensive margin, AI demand has limited effects on aggregate college enrollment and the college wage premium. AI demand also raises local income on average, with gains concentrated in initially richer locations, leading to spatial disparity.

Keywords: Artificial Intelligence, College Major Choice, Human Capital Investment, Labor Market, AI Labor Demand