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Dropout and Enrollment Trends in the Postwar Period: What Went Wrong in the 1970s?

In: Risky Behavior among Youths: An Economic Analysis

  • David Card
  • Thomas Lemieux

Over most of the 20th century successive generations of U.S. children had higher enrollment rates and rising levels of completed education. This trend reversed with the baby boom cohorts who attended school in the 1970s, and only resumed in the mid-1980s. Even today, the college entry rate of male high school seniors is not much higher than it was in 1968. In this paper, we use a variety of data sources to address the question What went wrong in the 1970s?' We focus on both demand-side factors and on a particular supply-side variable the relative size of the cohort currently in school. We find that tuition costs and local unemployment rates affect schooling decisions, although neither variable explains recent trends in enrollment or completed education. We also find that larger cohorts have lower schooling attainment, and that aggregate enrollment rates are correlated with changes in the earnings gains associated with a college degree. For women, our results suggest that the slowdown in education in the 1970s was a temporary response to large cohort sizes and low returns to education. For men, however, the decline in enrollment rates in the 1970s and slow recovery in the 1980s point to a permanent shift in the inter-cohort trend in educational attainment that will affect U.S. economic growth and trends in inequality for many decades to come.

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This chapter was published in:
  • Jonathan Gruber, 2001. "Risky Behavior among Youths: An Economic Analysis," NBER Books, National Bureau of Economic Research, Inc, number grub01-1, August.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 10694.
    Handle: RePEc:nbr:nberch:10694
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
    Phone: 617-868-3900
    Web page: http://www.nber.org
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    1. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, volume 1, number 5474, April.
    2. Gustman, Alan L & Steinmeier, Thomas L, 1981. "The Impact of Wages and Unemployment on Youth Enrollment and Labor Supply," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 553-60, November.
    3. Cameron, Stephen V & Heckman, James J, 1993. "The Nonequivalence of High School Equivalents," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 1-47, January.
    4. Willis, Robert J., 1987. "Wage determinants: A survey and reinterpretation of human capital earnings functions," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 10, pages 525-602 Elsevier.
    5. David Card & Thomas Lemieux, 2000. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," NBER Working Papers 7655, National Bureau of Economic Research, Inc.
    6. David Card & Thomas Lemieux, 2000. "Adapting to Circumstances (The Evolution of Work, School,and Living Arrangements among North American Youth)," NBER Chapters, in: Youth Employment and Joblessness in Advanced Countries, pages 171-214 National Bureau of Economic Research, Inc.
    7. David Card & Alan Krueger, 1990. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," NBER Working Papers 3358, National Bureau of Economic Research, Inc.
    8. Robert Shimer, 1999. "The Impact of Young Workers on the Aggregate Labor Market," NBER Working Papers 7306, National Bureau of Economic Research, Inc.
    9. Light, Audrey, 1995. "Hazard model estimates of the decision to reenroll in school," Labour Economics, Elsevier, vol. 2(4), pages 381-406, December.
    10. Solon, Gary, 1999. "Intergenerational mobility in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 29, pages 1761-1800 Elsevier.
    11. Moretti, Enrico, 2004. "Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 175-212.
    12. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
    13. Robert H. Topel, 1997. "Factor Proportions and Relative Wages: The Supply-Side Determinants of Wage Inequality," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 55-74, Spring.
    14. Finis Welch, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," UCLA Economics Working Papers 146, UCLA Department of Economics.
    15. Robert H. Haveman & Barbara L. Wolfe, 1984. "Schooling and Economic Well-Being: The Role of Nonmarket Effects," Journal of Human Resources, University of Wisconsin Press, vol. 19(3), pages 377-407.
    16. Welch, Finis, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S65-97, October.
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