Factors Affecting College Attainment and Student Ability in the U.S. since 1900

Kevin Donovan () and Christopher Herrington
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Kevin Donovan: University of Notre Dame

No 1701, Working Papers from VCU School of Business, Department of Economics

Abstract: We develop a dynamic lifecycle model to study long-run changes in college com- pletion and average ability of college students in cohorts born from 1900 to 1972. The model is disciplined in part by constructing a historical time series on real college costs from printed government documents covering this time period. The model captures nearly all of the increase in attainment for 1900 to 1950 cohorts. In counterfactual exercises we show that attainment would have been lower by almost half, on average, for 1925 to 1950 cohorts absent a large decrease in college costs relative to income. For post-1950 cohorts simultaneously rising college costs and education premia act in opposite directions to result in low college enrollment growth; however, endogenously declining average ability of college students lowers overall completion rates in the model. Furthermore, we find that economic factors have little impact on average student ability; rather, the precision of signals about true ability are the key driver of changes in average ability. We utilize historical data on the share of students who take SATs as a proxy for the increasing preci- sion of ability signals, and show that this allows the model to match the aggregate ability sorting patterns.

Keywords: College attainment; student ability; borrowing constraints; college costs; education premia (search for similar items in EconPapers)
JEL-codes: I2 J24 N31 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2017-01
New Economics Papers: this item is included in nep-edu and nep-his
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Citations: View citations in EconPapers (2)

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Journal Article: Factors Affecting College Attainment and Student Ability in the U.S. since 1900 (2019)
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