Public Policy, Technological Change, and the Evolution of Educational Attainment

The goal of this paper is to develop and calibrate a quantitative general equilibrium model to account for the joint evolution of educational attainment and relative wages among education groups in the U.S. over the 20th century. The key exogenous explanatory variables we consider are skill-biased technical change, U.S. education policies, and demographic changes. The main features of the model are: heterogeneity in ability among individuals; three levels of sequential educational attainment: less than high school, high school, and college; public and private colleges, frictionless asset market; endogenous schooling costs and skill prices; skill-biased technical change.