College attendance and the college wage premium: Differences by gender

This paper examines gender differences in the decision of whether or not to attend college. We use a human capital model of the decision to attend college, positing that this decision is a function of family background characteristics and the expected future earnings differential between college and high school graduates (the college wage premium). Using data from the NLSY, we demonstrate that for men, the higher the college wage premium, the more likely they are to attend college. However, for women, higher college wage premia have an insignificant effect on the decision to attend college and this effect is robust to a variety of specifications. In addition, we find some support for the comparative advantage hypothesis suggesting that individuals self-select themselves into that level of education which best utilizes their talents.