College Premiums and the Economic Value of an Undergraduate Degree

This thesis analyzes the difference in income between college and high school graduates—referred to as the “college premium”— between 1971 and 2014. Data from the Current Population Survey are used to investigate trends, demographic factors, and several determinants of college premiums. The results presented here indicate that premiums, after falling for the first half of the 1970s, increased dramatically over the remainder of the period under study. In addition, premiums differed significantly among certain demographic groups. Special consideration is given to the impact of selection bias and the popularity of different fields of study, in order to show that the economic value of a college degree increased with college premiums.