Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314614 
Year of Publication: 
2025
Series/Report no.: 
IZA Discussion Papers No. 17717
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
After growing substantially during the 1980s through the early 2000s, the college wage premium more recently has been largely unchanged, or stagnant. We extend the canonical production-function model of skill premiums to assess supply and demand contributions to the slowdown in the college wage premium, using annual CPS ASEC data from the early 1960s through 2023. To account for the rising importance of women in the college educated workforce, we estimate a hybrid model that incorporates components that are disaggregated by age and gender. We also allow for non-linearities and changes over time in the parameters of the aggregate production function. Our results suggest that the recent stagnation of the college wage premium primarily reflects demand factors, specifically a slowdown in the pace of skill-biased technological change.
Subjects: 
college wage premium
educational attainment
labor supply
technological change
worker substitutability
JEL: 
I2
J2
J3
Document Type: 
Working Paper

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