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The Slowdown in American Educational Attainment

Listed author(s):
  • Elisa Keller

    ()

    (University of Exeter)

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. My model reproduces the observed pattern in college attainment for the 1920 to 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.

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Paper provided by Durham University Business School in its series CEGAP Working Papers with number 2013_05.

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Date of creation: May 2013
Handle: RePEc:dur:cegapw:2013_05
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Durham University Business School, Mill Hill Lane, Durham DH1 3LB, England

Phone: +44 (0)191 334 5200
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Web page: https://www.dur.ac.uk/business/research/economics/economic-growth-and-policy/
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