Chapter

The Costs of Employing Highly Educated Workers

Robert B. Archibald and David H. Feldman

in Why Does College Cost So Much?

Published in print October 2010 | ISBN: 9780199744503
Published online January 2011 | e-ISBN: 9780199866168 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199744503.003.0004
The Costs of Employing Highly Educated Workers

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Higher education prices have evolved over time in a manner quite similar to other service industries that rely heavily on highly educated workers, and quite differently from the time paths of prices in other service industries. As Claudia Goldin and Lawrence Katz explain, the returns to education are the result of a race between technological progress that increases the demand for highly educated workers and educational attainment that increases the supply. Beginning in the late 1970s, a slowdown in the growth of educational attainment helped fuel a dramatic increase in the wages of highly skilled workers. Any explanation of the rising cost of college attendance must incorporate as part of the story this shift in the income distribution in favor of the well educated.

Keywords: educational attainment; Claudia Goldin; highly educated workers; income distribution; Lawrence Katz; service-producing industries; technological progress

Chapter.  4817 words.  Illustrated.

Subjects: Financial Markets

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