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On The Possibility that American College Students Are Not Human Capitalists


  • Gregory A. Lilly

    () (Department of Economics, Elon University)

  • Samuel K. Allen

    () (Department of Economics, Virginia Military Institute)


We assess the likelihood that earnings premiums influence college students' behavior as human capital theory suggests. We highlight several key observable patterns of earnings by age, sex, and for numerous college majors in recent decades, and propose a model of heterogeneous human capital to explain the data. Next, we formulate and test the hypothesis that greater expected average annual earnings by college major will induce greater proportions of college students to select higher-paying majors. The evidence implies that - at least for the observed range of earnings premiums - monetary incentives are insufficient to fully explain behavior.

Suggested Citation

  • Gregory A. Lilly & Samuel K. Allen, 2009. "On The Possibility that American College Students Are Not Human Capitalists," Working Papers 2009-01, Elon University, Department of Economics.
  • Handle: RePEc:elo:wpaper:2009-01

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    File Function: First version, 2009
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    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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