The slowdown in American educational attainmentJournal of Economic Dynamics and Control, 2014, vol. 46, issue C, 252-270 Abstract: Relative to those for high school graduates, lifetime earnings for college graduates are higher for more recent cohorts. At the same time, across successive cohorts born after 1950, there is a stagnation in the fraction of high school graduates that go on to complete a college degree. What explains this phenomenon? I formulate a life-cycle model of human capital accumulation in college and on the job, where successive cohorts decide whether or not to acquire a college degree as well as the quality of their college education. Cohorts differ by the sequence of rental price per unit of human capital they face and by the distribution of initial human capital across individuals. My model reproduces the observed pattern in college attainment for the 1920–1970 birth cohorts. The stagnation in college attainment is due to the decrease in the growth rate of the rental price per unit of human capital commencing in the 1970s. My model also generates about 80% of the increase in lifetime earnings for college graduates relative to those for high school graduates observed across cohorts. Keywords: Education; College attainment; Human capital; Earnings growth (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:46:y:2014:i:c:p:252-270 DOI: 10.1016/j.jedc.2014.07.007 Access Statistics for this article Journal of Economic Dynamics and Control is currently edited by J. Bullard, C. Chiarella, H. Dawid, C. H. Hommes, P. Klein and C. Otrok More articles in Journal of Economic Dynamics and Control from Elsevier |
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