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Ability, Educational Ranks, and Labor Market Trends: The Effects of Shifts in the Skill Composition of Educational Groups

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  • Dan T. Rosenbaum

Abstract

Large increases in educational attainment have resulted in dramatic shifts in the composition of educational groups. Utilizing the 1960-1990 Decennial Census and other data sources, I account for these changes in composition using educational ranks-cohort-specific relative rankings in educational attainment. For native white males, between 1969 and 1989 accounting for changes in the composition of educational groups (1) explains about half of the increase in the college/high school weekly earnings differential, (2) results in increases in weekly earnings for the less educated, and (3) doubles the increases in experience differentials for the high school graduates that are less educated. These findings raise questions about the common research strategy of using educational groups as a proxy for skill groups over long periods of time.

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  • Dan T. Rosenbaum, 2000. "Ability, Educational Ranks, and Labor Market Trends: The Effects of Shifts in the Skill Composition of Educational Groups," JCPR Working Papers 146, Northwestern University/University of Chicago Joint Center for Poverty Research.
    • Handle: RePEc:wop:jopovw:146
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    Cited by:

    1. Chinhui Juhn & Dae Il Kim & Francis Vella, 2005. "The Expansion of College Education in the United States: Is There Evidence of Declining Cohort Quality?," Economic Inquiry, Western Economic Association International, vol. 43(2), pages 303-315, April.
    2. Gregory Kurtzon, 2012. "Ability Composition Effects on the Education Premium," Working Papers 456, U.S. Bureau of Labor Statistics.
    3. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 705-746.
    4. Ireland, Norman & Naylor, Robin A. & Smith, Jeremy & Telhaj, Shqiponja, 2009. "Educational returns, ability composition and cohort effects: theory and evidence for cohorts of early-career UK graduates," LSE Research Online Documents on Economics 28608, London School of Economics and Political Science, LSE Library.
    5. Robert I. Lerman, 1999. "U.S. Wage-Inequality Trends and Recent Immigration," American Economic Review, American Economic Association, vol. 89(2), pages 23-28, May.
    6. Blom, Andreas & Holm-Nielsen, Lauritz & Verner, Dorte, 2001. "Education, earnings, and inequality in Brazil, 1982-98 - implications for education policy," Policy Research Working Paper Series 2686, The World Bank.
    7. Román Andrés Zárate, 2012. "Peer Effects, Cooperation and Competition in Human Capital Formation," Documentos CEDE 9795, Universidad de los Andes, Facultad de Economía, CEDE.
    8. Charles A. Fleischman & Joshua H. Gallin, 2001. "Employment persistence," Finance and Economics Discussion Series 2001-25, Board of Governors of the Federal Reserve System (U.S.).

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