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Has the College Wage Premium Continued to Rise? Evidence from Multiple U.S. Surveys

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  • Ashworth, Jared

    (Pepperdine University)

  • Ransom, Tyler

    (University of Oklahoma)

Abstract

This paper examines trends in the college wage premium (CWP) by birth cohort across the five major household surveys in the United States: the Census/ACS, CPS, NLSY, PSID, and SIPP. We document a flattening in the CWP for birth cohorts 1978 and onward in each survey and even a decline for birth cohorts 1980–1985 in the NLSY and SIPP. We discuss potential reasons for this finding and show that the empirical discrepancy is not a function of differences in composition across surveys. Our results provide crucial context for the vast economic literatures that use these surveys to measure returns to skill, and intertemporal changes in those returns.

Suggested Citation

  • Ashworth, Jared & Ransom, Tyler, 2018. "Has the College Wage Premium Continued to Rise? Evidence from Multiple U.S. Surveys," IZA Discussion Papers 11657, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11657
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    Cited by:

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    2. Spencer Bastani & Tomer Blumkin & Luca Micheletto, 2021. "Optimal Redistribution in the Presence of Signaling," CESifo Working Paper Series 9210, CESifo.
    3. Michael Kaganovich, 2023. "Trade-Offs in Choosing a College Major," CESifo Working Paper Series 10650, CESifo.
    4. Jeffrey T. Denning & Eric R. Eide & Kevin J. Mumford & Richard W. Patterson & Merrill Warnick, 2022. "Why Have College Completion Rates Increased?," American Economic Journal: Applied Economics, American Economic Association, vol. 14(3), pages 1-29, July.
    5. Michael Kaganovich & Morgan Taylor & Ruli Xiao, 2023. "Gender Differences in Persistence in a Field of Study: This Isn’t All about Grades," Journal of Human Capital, University of Chicago Press, vol. 17(4), pages 503-556.
    6. Gaulke, Amanda P., 2022. "Returns to bachelor’s degree completion among stopouts," Economics of Education Review, Elsevier, vol. 86(C).
    7. Michael Kaganovich & Morgan Taylor & Ruli Xiao, 2021. "Gender Differences in Persistence in a Field of Study," CESifo Working Paper Series 9087, CESifo.
    8. Griffith, Amanda L. & Sovero, Veronica, 2021. "Under pressure: How faculty gender and contract uncertainty impact students’ grades," Economics of Education Review, Elsevier, vol. 83(C).
    9. Buchmueller, Gerda & Walker, Ian, 2020. "The Graduate Wage and Earnings Premia and the Role of Non-Cognitive Skills," IZA Discussion Papers 13248, Institute of Labor Economics (IZA).
    10. Yousef Makhlouf & Christopher Lalley, 2023. "Education Expansion, Income Inequality and Structural Transformation: Evidence From OECD Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 169(1), pages 255-281, September.
    11. Leila Bengali & Marcus Sander & Robert G. Valletta & Cindy Zhao, 2023. "Falling College Wage Premiums by Race and Ethnicity," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2023(22), pages 1-6, August.
    12. Boero, Gianna & Nathwani, Tej & Naylor, Robin & Smith, Jeremy, 2021. "Graduate Earnings Premia in the UK : Decline and Fall?," The Warwick Economics Research Paper Series (TWERPS) 1387, University of Warwick, Department of Economics.
    13. Giovanni Gallipoli & Khalil Esmkhani & Michael Böhm, 2019. "Skill-Biased Firms and the Distribution of Labor Market Returns," 2019 Meeting Papers 1199, Society for Economic Dynamics.
    14. Benjamin Artz & David M. Welsch, 2021. "Overeducation and wages revisited: A two‐cohort comparison and random coefficients approach," Southern Economic Journal, John Wiley & Sons, vol. 87(3), pages 909-936, January.
    15. Almas Heshmati & Jungsuk Kim & Jacob Wood, 2019. "A Survey of Inclusive Growth Policy," Economies, MDPI, vol. 7(3), pages 1-18, July.

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    More about this item

    Keywords

    college wage premium; returns to education;

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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