In this paper, we provide new evidence that earnings for various college majors differ across large metropolitan areas in the United States. We then set out to explain, at least in part, why these differences exist. We find that the intrinsic elements of geographic areas, such as common agglomeration effects and spatial differences in demand, are an important explanation for all majors. Further, we find that the endogenous sorting of individuals plays less of a role, particularly for domestic‐born college graduates. The sorting of lower‐paid, foreign‐born college graduates, however, increases the estimated dispersion in returns across geographic areas.