The Market for College Graduates and the Worldwide Boom in Higher Education of Women
Author(s): Gary S. Becker, William H. J. Hubbard and Kevin M. Murphy
Source: The American Economic Review, Vol. 100, No. 2, PAPERS AND PROCEEDINGS OF THE
One Hundred Twenty Second Annual Meeting OF THE AMERICAN ECONOMIC ASSOCIATION
(May 2010), pp. 229-233
Published by: American Economic Association
Stable URL: http://www.jstor.org/stable/27804995 .
Accessed: 08/10/2014 02:11
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp
.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.
American Economic Association is collaborating with JSTOR to digitize, preserve and extend access to The
American Economic Review.
http://www.jstor.org
American Economie
229-233
S. Becker,
William
H. J.Hubbard,
of Economics,
University of
Department
IL 60637 and the Hoover
Institution
Chicago, Chicago,
Hubbard:
(e-mail: gbecker@uchicago.edu);
Department
IL 60637
of Economics, University of Chicago, Chicago,
(e-mail: whubbard@uchicago.edu);
Murphy: Department
of Economics
and Booth School of Business, University
IL 60637
of Chicago,
(e-mail: murphy?
Chicago,
In preparing this paper, we had excel
ChicagoBooth.edu).
lent research assistance from JeffPicel.
and Kevin
M. Murphy*
Among 30-34-Year-Olds
Figure 1a: Gender Difference
by Per Capita GDP, 1970
in College
Attainment,
02
+ p(S;H)?U2(x2J2,S;H),
(2) V= Ux{xx,W,H)
-?L__^_
6
l?
_^_
10
11
Ln?DPp?C?pte(PPP)
Figure 1b:Gender Difference
Among
by Per Capita
in College
Education,
30-34-Year-Olds
GDP, 2010 Proj.
(1)
S = F(hM,Ac,An)
(3) ? + T^
+
T +
? +
+ ,/,
WiA =
Wi11
+
pw2(S,H)
1+ r
+ pM(S)
1+ r
W
is expected full wealth, w refers to
hourly earnings, and the total time in each
period is normalized to one. The left-hand side
(LHS) shows how full wealth is spent,where T
is tuitionand fees (we assume for simplicity here
thatT is fixed, independent of h), and wxh is the
earnings forgone from being in college.
Since college education raises hourly earnings
in the second period, thederivative w2s > 0. This
derivative measures the hourly earnings returns
per unit of college education and may vary with
the amount of college education. College educa
tion also raises the likelihood of marrying per
sons with greater education and other attractive
characteristics. The expected gain frommarriage
in the second period is treated as an increment to
expected wealth, p(S)M(S). Since the gain from
marriage is generally greater for thosewith a col
lege education,Ms > 0.
where W
100 NO.
BOOM
be
expressed
Pe^2s
(A\
j 1+ r
1
as
+,
_i P?U2s
pMs +
Ulx
psM
1+ r
?PsUl
UXx
ps[e2w2
1+ r
x2]
w?_
Fh
of performance
in college.
IN HIGHER
EDUCATION
231
OF WOMEN
These
benefits,
however,
are
for
greater
attendance.
Equilibrium
Returns
and Number
of Men
To
better
understand
why
women
are
now
= w
=
= Cm+
(5) C
aCf D(R ^P)
is the effective number of college
demanded, a is the conversion rate
graduates (Cf) into male graduates
P represents technological progress
forces that shift demand for college
is negatively related to the
Demand
graduates.
The
R.
supply of college graduates
wage ratio,
of gender g is positively related to the common
benefitR from going to college:
where C
graduates
of female
(Cm), and
and other
MAY 2010
232
College wage
premium
Figure
(6)
where
from
Cg
and
Nm
college
for College-Educated
Sg(R,Ns,Acg,Ang)
as
(7) DIR
in
Sm(R,Nm,Acm,Anm)
+
aSf(R,NpAcpAnf)
Given P, theWs^nd
theA's, equality between D
and S determines the equilibrium monetary ben
efit from going to college, R, and the number of
persons of each gender thatgo to college, Cm and
Cf. Figure 2 compares the equilibrium number of
male and female college graduates and the equi
librium return,R, for the period before themid
1970s with theperiod since themid-1990s.
At the 1970 equilibrium returnR, the num
ber of women going to college is significantly
below that of men: Cm > Cf. Even though it
appears that noncognitive abilities have long
been on the average higher forwomen thanmen,
thatwas more than offset in earlier decades by
sufficiently
Workers,
greater
nonmonetary
returns
to col
VOL. 100NO. 2
not
remained
constant
as monetary
returns
and
stay married.
Moreover,
as we
argue
women
do,
the narrowing
in the gender
non
the fraction
of men
going.
However,
233
women
and men
who
III.
go
to college.
Conclusion
Further,
greater
average
noncognitive
REFERENCES
Becker,
Gary
S., William
H.J.
Hubbard,
and
Unpublished.