Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/64660 
Year of Publication: 
2008
Series/Report no.: 
cemmap working paper No. CWP02/09
Publisher: 
Centre for Microdata Methods and Practice (cemmap), London
Abstract: 
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 8 percentage points in the college premium. The standard demand and supply framework (Katz and Murphy, 1992, Card and Lemieux, 2001) can qualitatively account for the trend in the college and age premia over this period, but the quantitative adjustments that need to be made to account for changes in quality are substantial. Furthermore, the standard interpretation of the supply effect can be misleading if the quality of college workers is not controlled for. To illustrate the importance of these adjustments, we reanalyze the problem studied in Card and Lemieux (2001), who observe that the rise in the college premium in the 1980s occurred mainly for young workers, and attribute this to the differential behavior of the supply of skill between the young and the old. Our results show that changes in quality are as important as changes in prices to explain the phenomenon they document.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
776.47 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.