Assigning education status in CBO's long-term microsimulation model

Original publisher: [Washington, D.C.]: Congress of the U.S., Congressional Budget Office, [2008] OCLC Number: (OCoLC)262687438 Subject: Educational tests and measurements -- Forecasting. Excerpt: ... which there are no raw data, the regression obtains estimates using observations from 4 the other cohorts. Differences in the age - earnings profile by educational attainment are evident when birth cohort is held constant ( see Figure 3 and Web Appendix Figures W1 through W3 ). For men in the 1940s cohort ( Figure 3, top ), there is significantly more curva-ture for college graduates than there is for men with less education. College graduates earn less than other groups from about age 22 to age 26, but the steeper slope of the profile then results in higher earnings for that group for the rest of their work lives. For the 1970s cohort ( Figure 3, bottom ), the profiles are similar, but the starting 5 points are slightly lower than for the 1940s cohort. The figures show differences between natives and the foreign born that are generally larger for groups with more education and for more recent cohorts. For the 1940s cohort, for example, the average difference between earnings predicted for natives and foreign-born people between the ages of 30 and 50 was $ 1,137 ( less than high school ), $ 973 ( high school graduates ), $ 1,227 ( some college ), and $ 2,338 ( college graduates ). The same metric for the 1970s cohorts yields larger differences for the three highest education groups: $ 661 ( less than high school ), $ 1,079 ( high school 6 graduates ), $ 1,519 ( some college ), and $ 3,622 ( college graduates ). The differences in the predicted age - earnings profiles from one education group to another are well established in the economics literature and reflect increasing returns on the investment in education, changing demands for labor, changes in the return on investment in different sets of skills, and changes in technology ( see, for example, Card [ 1999 ] ...