The Increase in College Premium and the Decline in Low-Skill Wages: A Signaling Story

2016 ◽  
Vol 18 (3) ◽  
pp. 363-384 ◽  
Author(s):  
PAU BALART
Keyword(s):  
College Premium

Risk, the College Premium, and Aggregate Human Capital Investment

2021 ◽  
Vol 13 (2) ◽  
pp. 168-213
Author(s):  
Kartik Athreya ◽  
Janice Eberly
Keyword(s):  
Human Capital ◽  
Graduate Students ◽  
College Readiness ◽  
Capital Investment ◽  
College Education ◽  
College Attainment ◽  
Biased Technological Change ◽  
Quantitative Results ◽  
The Impact ◽  
College Premium

Despite increases in the college earnings premium to persistently high levels, investment in college education remains low. We can understand this apparent puzzle by considering the risk of attending college and, in particular, the possibility of failing to graduate. Students with a reasonable probability of completing college already enroll, and for those who do not enroll, the low chance of completion blunts the impact of the rising college premium. In the absence of improved college readiness, our quantitative results suggest that continuing long-standing trends in skill-biased technological change can be expected primarily to increase earnings inequality rather than college attainment. (JEL E24, I22, I23, J24, J31, O33)

Returns to Skills and the College Premium

2011 ◽  
Vol 43 ◽  
pp. 39-86 ◽  
Author(s):  
FLAVIO CUNHA ◽  
FATIH KARAHAN ◽  
ILTON SOARES
Keyword(s):  
Returns To Skills ◽  
College Premium

The Price of Experience

2015 ◽  
Vol 105 (2) ◽  
pp. 784-815 ◽  
Author(s):  
Hyeok Jeong ◽  
Yong Kim ◽  
Iourii Manovskii
Keyword(s):  
Life Cycle ◽  
Labor Economics ◽  
Age Groups ◽  
Demographic Changes ◽  
Cross Sectional ◽  
Empirical Regularities ◽  
Active Research ◽  
Education Groups ◽  
College Premium

We identify a key role of factor supply, driven by demographic changes, in shaping several empirical regularities that are a focus of active research in macro and labor economics. In particular, demographic changes alone can account for the large movements of the return to experience over the last four decades, for the differential dynamics of the age premium across education groups emphasized by Katz and Murphy (1992), for the differential dynamics of the college premium across age groups emphasized by Card and Lemieux (2001), and for the changes in cross-sectional and cohort-based life-cycle profiles emphasized by Kambourov and Manovskii (2005). (JEL D91, E24, I23, J11, J24, J31)

scholarly journals Changes in Relative Ability as a Determinant of the U.S. College Premium

2015 ◽  
Vol 7 (1) ◽  
pp. 84-110
Author(s):  
Darius Martin ◽  
Yongli Zhang
Keyword(s):  
The United States ◽  
College Attendance ◽  
Two Dimensions ◽  
Relative Wage ◽  
Heterogeneous Agent ◽  
Highly Educated ◽  
Relative Ability ◽  
Endogenous Schooling ◽  
College Educated ◽  
College Premium

We develop a macroeconomic framework to estimate the importance of fluctuations in relative ability in accounting for trends in the college premium in the United States since 1965. The theoretical scaffolding is a heterogeneous agent model with two dimensions of ability and endogenous schooling choice, with exogenous skill-biased technological change (SBTC), college tuition, and noneconomic social forces. We solve for conditions under which SBTC reduces the relative ability of college educated workers, and show that these conditions are met in the data. We attribute the drop in the college premium over the 1970s to a 25.5% drop in the mean relative quality of college-educated workers from 1968 to 1977. We find that SBTC explains about two thirds of the increase in college attendance since 1965, and that absent both supply shifts and a supply response to SBTC, the relative wage of highly educated workers would have been 77.1% larger in 2013.

scholarly journals Trends in Quality-Adjusted Skill Premia in the United States, 1960–2000

2011 ◽  
Vol 101 (6) ◽  
pp. 2309-2349 ◽  
Author(s):  
Pedro Carneiro ◽  
Sokbae Lee
Keyword(s):  
United States ◽  
College Enrollment ◽  
College Graduates ◽  
The United States ◽  
Average Quality ◽  
Demand And Supply ◽  
Percentage Points ◽  
New Evidence ◽  
College Premium

This paper presents new evidence that increases in college enrollment lead to a decline in the average quality of college graduates between 1960 and 2000, resulting in a decrease of 6 percentage points in the college premium. A standard demand and supply framework can qualitatively account for the trend in the college and age premia over this period, but substantial quantitative adjustments are needed to account for changes in quality. (JEL I23, J24, J31)

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