Working Paper: CEPR ID: DP8108
Authors: Pedro Carneiro; Sokbae Lee
Abstract: This paper presents new evidence that increases in college enrollment lead to a decline in the average quality of college graduates between 1960 and 2000, resulting in a decrease of 6 percentage points in the college premium. We show that although a standard demand and supply framework can qualitatively account for the trend in the college and age premia over this period, substantial quantitative adjustments still need to be made to account for changes in quality.
Keywords: college premium; composition effects; inequality
JEL Codes: J0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increases in college enrollment (I23) | decline in average quality of college graduates (D29) |
| decline in average quality of college graduates (D29) | decrease in college premium (D29) |
| increases in college enrollment (I23) | decrease in college premium (D29) |
| decline in average quality of college graduates (D29) | fluctuations in age premium (J26) |
| influx of marginal college students (D29) | dilution of overall quality of college graduates (D29) |
| increased attendance (I24) | lower quality learning experiences (I24) |