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Ability Composition Effects on the Education Premium

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  • Gregory Kurtzon

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    (U.S. Bureau of Labor Statistics)

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    Abstract

    If higher ability individuals are more likely to attend college and if there is significant ability bias in the college education premium, then a significant portion of the observed complementarity between the college and non-college educated is due to changes in the ability composition of education groups. If college attainment rose to over half the population, this composition e¤ect would reverse, as is illustrated with high school attainment. If there is little ability bias, the ability distribution is nearly degenerate, with the awkward implication that the most productive in- dividuals would earn barely more without a college education than the least.

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    Bibliographic Info

    Paper provided by U.S. Bureau of Labor Statistics in its series Working Papers with number 456.

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    Length: 27 pages
    Date of creation: May 2012
    Date of revision:
    Handle: RePEc:bls:wpaper:ec120050

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    Keywords: composition effects; ability bias; college attainment;

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    1. Carneiro, Pedro & Lee, Sokbae, 2010. "Trends in Quality-Adjusted Skill Premia in the United States, 1960-2000," IZA Discussion Papers 5295, Institute for the Study of Labor (IZA).
    2. Bound, John & Turner, Sarah, 2007. "Cohort crowding: How resources affect collegiate attainment," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 877-899, June.
    3. Dan T. Rosenbaum, 2000. "Ability, Educational Ranks, and Labor Market Trends: The Effects of Shifts in the Skill Composition of Educational Groups," JCPR Working Papers 146, Northwestern University/University of Chicago Joint Center for Poverty Research.
    4. Claudia Goldin, 1999. "A Brief History of Education in the United States," NBER Historical Working Papers 0119, National Bureau of Economic Research, Inc.
    5. Stephen Cameron & Christopher Taber, 2000. "Borrowing Constraints and the Returns to Schooling," NBER Working Papers 7761, National Bureau of Economic Research, Inc.
    6. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
    7. Murphy, Kevin M & Welch, Finis, 1992. "The Structure of Wages," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 285-326, February.
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