“Student Abilities during the Expansion of US Education”, 2014-04-01 ():
We document a rising test score gap between students who go to college and those who do not.
We model school wage premiums due to skill prices, ability, and human capital.
We use test score data to calibrate the model.
We find that half of the college wage premium can be attributed to ability.
We find that the rise of the college premium can be attributed to changing ability.
[slides] The US experienced two dramatic changes in the structure of education in a 50 year period. The first was a large expansion of educational attainment; the second, an increase in test score gaps between college-bound and non-college-bound students.
This paper documents the impact of these two trends on the composition of school groups by ability [IQ] and the importance of these composition effects for wages.
The main finding is that there is a growing gap between the abilities of high school and college-educated workers that accounts for one-half of the college wage premium for recent cohorts and for the entire rise of the college wage premium between the 1910 and 1960 birth cohorts.