As the workforce has become more educated, educational decisions are about what type of education to pursue as well as how much to pursue. In college, individuals somewhat specialize through their choice of college major. Further specialization occurs in graduate school. This chapter investigates how majors and graduate school affect labor market outcomes, as well as how individuals make these potentially important decisions. To do so, we develop a dynamic model of educational decision-making. In light of the model, we examine the estimation issues associated with obtaining causal effects of educational choices on earnings. We then examine ways that authors have overcome the selection problem, as well as the approaches authors have taken to estimate the process by which these educational decisions are made. © 2016 Elsevier B.V.