Occupations and the Polarization of the Bachelor’s Degree in the United States

• In Event: 20212 - Labor Market and Social Mobility

Abstract

The present study explains a paradoxical finding: In more recent birth cohorts, workers whose highest education is a bachelor’s degree have both higher average earnings and higher likelihood of entering less-privileged occupations compared with earlier ones. The key to understanding how this is possible is that each result is driven by different subsets of workers, some of whom are displaced from higher occupational positions and others of whom benefit from broad trends in occupational polarization. While more bachelor’s degree-level workers sort into worse occupations across birth cohorts, the remaining but shrinking proportion in privileged occupations earn more than ever before. The polarization of the occupation-level wages and sorting of bachelor’s-level workers effectively flattens and polarizes the economic returns to a bachelor’s degree, makes the average income a less useful summary of educational outcomes, and shows that minimal changes to the average outcome can obscure large societal shifts.

Author

• Jonathan Horowitz, University of Toronto