Volume 6, Number 3 (Summer) 1971
Schweitzer, Stuart O. 1971. "Occupational Choice, High School Graduation, and Investment in Human Capital." Journal of Human Resources 6(3):321-332.
High school students are exhorted to remain in high school until graduation. Our "common sense" a priori feeling that a high school diploma is a wise investment is supported by evidence showing that the rate of return to high school completion is, on average, very high. Yet the high school student often makes the conscious choice to drop out.
In an effort to understand this behavior, the present value of lifetime earnings attributable to completion of high school is computed, both for broad demographic groups and for specific occupational categories. The author finds, as others have, that the return to high school graduation is, indeed, high. But what is true generally is found not to be true for specific occupations. For students who have some specific occupations in mind, high school graduation does not appear justified on economic grounds, when past cross-sectional earnings patterns are used to predict the future.
The author is on the Research Staff of The Urban Institute, Washington. The research was begun while the author was Assistant Professor of Economics at Wayne State University and was completed at The Urban Institute under Contract 82-09-68-44 from the Office of Manpower Research, Manpower Administration, U.S. Department of Labor. Initial work was done by Craig R. Hoogstra. Numerous helpful comments were subsequently given by Mark L. Kahn and Larry D. Singell and by C. C. Holt, C. D. MacRae, R. E. Smith, and the referees of this Journal. Remaining errors are the author's alone. Opinions expressed are those of the author and do not necessarily represent the views of The Urban Institute or its sponsors.
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