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Supply of College-Educated Workers: The Roles of College Premia, College Costs, and Risk
Supply of College-Educated Workers: The Roles of College Premia, College Costs, and Risk

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By Kartik Athreya (au); Janice Eberly (au)
Year: 2013
Pages: 55
Binding Paperback
ISBN 978-1-4578-4609-0

Product Code: 1457846098

Despite a large measured college premium, roughly one-third of all high-school graduates currently do not enroll in any form of college. Moreover, while recent increases in the premium have been accompanied by increases in enrollment, college attainment has remained flat. This paper studies the roles played by college premia, college costs, and risk, ceteris paribus, for college enrollment and attainment in a simple quantitative model of risky college investment. Results suggest that most U.S. high-school completers are currently inframarginal with respect to the college premium. The authors find, however, that the levels of current premia, costs, and uninsurable risks all matter for this. Their results imply that, barring improvements in collegiate preparedness and attrition rates, high and persistent college premia, with high attendant levels of earnings inequality, may accompany the shift in demand towards skilled labor, which recent work suggests is under way. Figures. This is a print on demand report.

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