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Career Patterns of College Graduates in a Declining Job Market

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  • Richard B. Freeman

Abstract

This study uses Current Population Survey cohort data and the National Longitudinal Survey for men aged 14-24 in 1966 to examine the earnings growth of college graduates relative to high school graduates during the 1970s depressed market for graduates. The principal finding is that the longitudinal/cohort earnings profile for college graduates flattened markedly relative to that for high school graduates in the 1970s. With smaller growth rates of earnings for the college educated in the period than in previous decades, the evidence lends no support to the hypothesis that the graduates who suffered economic losses during the period will recover the traditional college advantage as time proceeds. The finding that the longitudinal profile of college graduates flattened contrasts sharply with the steepening of cross-section profiles in the period, raising serious doubts about the validity of standard cross-section analyses of age-earnings curves to assess lifetime income profiles and investments in training.

Suggested Citation

  • Richard B. Freeman, 1981. "Career Patterns of College Graduates in a Declining Job Market," NBER Working Papers 0750, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:0750 Note: LS
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    References listed on IDEAS

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    1. Johnson, William R, 1980. "Vintage Effects in the Earnings of White American Men," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 399-407, August.
    2. Richard B. Freeman, 1975. "Overinvestment in College Training?," Journal of Human Resources, University of Wisconsin Press, vol. 10(3), pages 287-311.
    3. anonymous, 1976. "Working Papers," Management Science, INFORMS, vol. 22(5), pages 618-626, January.
    4. Freeman, Richard B, 1977. "The Decline in the Economic Rewards to College Education," The Review of Economics and Statistics, MIT Press, vol. 59(1), pages 18-29, February.
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    Cited by:

    1. Philip Oreopoulos & Till von Wachter & Andrew Heisz, 2006. "The Short- and Long-Term Career Effects of Graduating in a Recession: Hysteresis and Heterogeneity in the Market for College Graduates," NBER Working Papers 12159, National Bureau of Economic Research, Inc.
    2. Bellou, Andriana & Kaymak, Baris, 2011. "Real wage growth over the business cycle:contractual versus spot markets," MPRA Paper 30401, University Library of Munich, Germany.
    3. Beartice Brunner & Andreas Kuhn, 2009. "To Shape the Future: How Labor Market Entry Conditions Affect Individuals’s Long-Run Wage Profiles," NRN working papers 2009-29, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    4. Beatrice Brunner & Andreas Kuhn, 2009. "To shape the future: How labor market entry conditions affect individuals' long-run wage profiles," IEW - Working Papers 457, Institute for Empirical Research in Economics - University of Zurich.
    5. Baris Kaymak, 2009. "Ability Bias and the Rising Education Premium in the United States: A Cohort-Based Analysis," Journal of Human Capital, University of Chicago Press, vol. 3(3), pages 224-267.
    6. Brunner, Beatrice & Kuhn, Andreas, 2009. "To Shape the Future: How Labor Market Entry Conditions Affect Individuals' Long-Run Wage Profiles," IZA Discussion Papers 4601, Institute for the Study of Labor (IZA).

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