What Explains Growing Gender and Racial Education Gaps?

In the 1960 cohort, American men and women graduated from college at similar rates, and this was true for Whites, Blacks and Hispanics. But in more recent cohorts, women graduate at much higher rates than men. Gaps between race/ethnic groups have also widened. To understand these patterns, we develop a model of individual and family decision-making where education, labor supply, marriage and fertility are all endogenous. Assuming stable preferences, our model explains changes in education for the ‘60-‘80 cohorts based on three exogenous factors: family background, labor market and marriage market constraints. We find changes in parental background account for 1/4 of the growth in women’s college graduation from the ’60 to ’80 cohort. The marriage market accounts for 1/5 and the labor market explains the rest. Thus, parent education plays an important role in generating social mobility, enabling us to predict future evolution of college graduation rates due to this factor. We predict White women’s graduation rate will plateau, while that of Hispanic and Black women will grow rapidly. But the aggregate graduation rate will grow very slowly due to the increasing Hispanic share of the population.