Volume 10, Number 3 (Summer) 1975
Freeman, Richard B. 1975. "Overinvestment in College Training?" Journal of Human Resources 10(3):287-311.
The college job market underwent an unprecedented downturn in the 1970s when the earnings of graduates relative to other workers, the rate of return to investing in higher education, and employment opportunities dropped sharply, especially for new graduates. This paper examines the quantitative dimensions, causes, and consequences of the "new depression" in the market. It explains the downturn by slackened demand due to changes in the industrial structure and continued growth of supply. A major finding is that the fraction of young men choosing college fell in the seventies, apparently the result of responsive supply behavior to the depressed market.
The author is Associate Professor of Economics, Harvard University. The author wishes to thank the national Institute of Education for the support under Grant No. G-00-0202.
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US ISSN 0022-166X