Ability Bias and the Rising Education Premium in the United States: A Cohort-Based Analysis

Baris Kaymak

Journal of Human Capital, 2009, vol. 3, issue 3, 224-267

Abstract: I use differences in educational attainment by birth cohorts to estimate the rise in the return to education in the United States. If average ability is similar among nearby cohorts, then differences in educational attainment lead to differences in earnings only if education is productive. The results reveal that (i) the return to a year of schooling increased from 4.8 percent to 8.4 percent between 1964 and 2003, (ii) the ability bias rose from 1.8 percent to 4.7 percent during the same period, and (iii) the acceleration in the education premium after 1980 is explained almost entirely by the rise in the ability bias. (c) 2009 by The University of Chicago. All rights reserved.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ucp:jhucap:v:3:y:2009:i:3:p:224-267

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