Changes in College Skills and the Rise in the College Wage Premium

• Published in: The Journal of human resources Vol. 30; no. 2; pp. 280 - 310
• Main Authors: Grogger, Jeff, Eide, Eric
• Format: Journal Article
• Language: English
• Published: Madison University of Wisconsin Press 01.04.1995
• Subjects: Academic degrees; Achievement tests; Bachelors degrees; Changes; College Graduates; Compensation and benefits; Correlates; Earnings; Education; Educational attainment; Employees; Entry Workers; Females; Graduates; Graduation rate; High School and Beyond (NCES); High School Graduates; Interviews; Job Skills; Labor force; Labor market; Labor markets; Longitudinal studies; Majors (Students); Males; Mathematics Skills; Men; National Longitudinal Study High School Class 1972; Outcomes of Education; Polls & surveys; Relative wages; Salaries; Salary Wage Differentials; School dropouts; Secondary schools; Skills; Social interaction; Social research; Standardized Tests; Students; Test scores; USA; Variables; Wages; Wages & salaries; Women
• ISSN: 0022-166X; 1548-8004
• DOI: 10.2307/146120

The college wage premium for new labor market entrants rose sharply during the 1980s. We ask how much of this change arose from changes in the skill level of the typical college graduate. We find that skills attained prior to college, as measured by standardized test scores and high school grades, had no effect on the change in the college wage premium for men. In contrast, the returns to math ability rose considerably for women; failing to account for math skills thus substantially overstates the growth in the female college wage premium. Skills acquired in college, as reflected in the distribution of students across majors, had important effects on the relative wages of men. The trend away from low-skill subjects such as education and toward high-skill subjects such as engineering accounts for one-fourth of the rise in the male college wage premium.