Career Patterns of College Graduates in a Declining Job Market

This study uses Current Population Survey cohort data and the National Longitudinal Survey for men aged 14-24 in 1966 to examine the earnings growth of college graduates relative to high school graduates during the 1970s depressed market for graduates. The principal finding is that the longitudinal/cohort earnings profile for college graduates flattened markedly relative to that for high school graduates in the 1970s. With smaller growth rates of earnings for the college educated in the period than in previous decades, the evidence lends no support to the hypothesis that the graduates who suffered economic losses during the period will recover the traditional college advantage as time proceeds. The finding that the longitudinal profile of college graduates flattened contrasts sharply with the steepening of cross-section profiles in the period, raising serious doubts about the validity of standard cross-section analyses of age-earnings curves to assess lifetime income profiles and investments in training.