Trends in Quality Adjusted Skill Premia in the US, 1960-2000

Carneiro, Pedro Manuel; Lee, Sokbae

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Trends in Quality Adjusted Skill Premia in the US, 1960-2000

CEPR Discussion Paper No. DP8108

73 Pages Posted: 29 Nov 2010

See all articles by Pedro Manuel Carneiro

Pedro Manuel Carneiro

University College London - Department of Economics; IZA Institute of Labor Economics

Sokbae Lee

University College London

Date Written: November 2010

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 Classification: J0

Suggested Citation: Suggested Citation

Carneiro, Pedro Manuel and Lee, Sokbae, Trends in Quality Adjusted Skill Premia in the US, 1960-2000 (November 2010). CEPR Discussion Paper No. DP8108, Available at SSRN: https://ssrn.com/abstract=1714880