Over the past 80 years, the United States experienced a dramatic increase in college enrollment and completion. In 1950, only 7.7 percent of people in the United States age 25 to 29 had a bachelor’s degree or more, but this number tripled to 22.5 percent in 1980, and further increased to 31.7 percent by 2010. What is the worth of a college degree when higher education expands? The relative education hypothesis posits that when college degrees are rare, individuals with more education have less competition to enter highly-skilled occupations. The increasing cultural value that individuals and employers attach to college education, the diffusion of educational expectations across class lines and visible economic returns to education stimulating university attendance college is increasingly an institutionalized part of the life course.
Using new measurements of occupation-level verbal, quantitative, and analytic skills, this study tests the changing effect of education on skill utilization across 70 years of birth cohorts from 1971 to 2010, net of all other age, period, and cohort trends.This study asks whether individuals from better-educated cohorts are pushed into less-skilled work by increasing cohort competition. Using the skill ratings and the Annual Social and Economic Supplement from 1971 to 2010, the study examines how individuals’ education levels affect skill. The Annual Social and Economic Supplement (ASEC)—conducted as part of the Current Population Survey (CPS) every March—is an ideal dataset for this analysis.
The author uses ASEC hypothesis that as educational attainment rises in the population, individuals with college degrees are increasingly shuffled into lower-skilled jobs. The hypothesis holds across verbal, quantitative, and analytic skill utilization; in both male and female samples; and is net of all confounders from age, period, and cohort trends, as well as other demographic and geographic changes to the labor force. Previous research failed to find this effect because it tested for gaps in wages instead of directly measuring skill utilization. Economists suggest that sending more individuals to college leads to concrete technological advances and economic growth (]). From this perspective, sending more high school students to college is justified. However, this study confirms that even as the average dollar return to college increases, college-educated workers are less likely to enter the highly-skilled jobs that take advantage of this increased monetary return. Although the number of high-skilled jobs is not fixed, it is also not infinite and is likely outstripped by the supply of well-educated adults entering the labor force. Sending more people to college to improve their life circumstances leads to diminishing returns for occupational advancement, and it is not an ideal intervention to reduce population-level inequality. As Hirsch (1976:5) argues: “If everyone stands on tiptoe, no one sees better.”
What is the worth of a college degree when higher education expands? The relative education hypothesis posits that when college degrees are rare, individuals with more education have less competition to enter highly-skilled occupations. When college degrees are more common, there may not be enough highly-skilled jobs to go around; some college-educated workers lose out to others and are pushed into less-skilled jobs. Using new measurements of occupation-level verbal, quantitative, and analytic skills, this study tests the changing effect of education on skill utilization across 70 years of birth cohorts from 1971 to 2010, net of all other age, period, and cohort trends. Higher-education expansion erodes the value of a college degree, and college-educated workers are at greater risk for underemployment in less cognitively demanding occupations. This raises questions about the sources of rising income inequality, skill utilization across the working life course, occupational sex segregation, and how returns to education have changed across different life domains.
Relative Education and the Advantage of a College Degree
First Published July 9, 2018 Research Article
From American Sociological Review