The Nonequivalence of College Equivalents
DOI:
https://doi.org/10.25071/1874-6322.40653Keywords:
college earnings premium, lifetime earnings, age of attainment, job ladderAbstract
This article shows that labour-market outcomes decline with the age at which an individual attains the education level of a bachelor’s degree (BA). When a BA is obtained before age 24 (i.e., ‘on time’), its premium to the educated individual is more than three times that of a BA attained at or after age 24 (i.e., ‘late’). This difference is not driven by selection: 90 per cent of the association remains after adjusting for pre-college factors. The initial occupations of attained by individuals one year after completing a BA are similar, whether that individual graduates on time or not. By age 35, however, ‘on-time’ graduates are in occupations with higher expected income and education requirements. Our findings are consistent with a job-ladder story, in which ‘late’-BA attainers do not fully capture the earnings premium enjoyed by their counterparts who followed the more traditional schedule. This is either because their pre-BA work experience is a weak substitute for the skills required in BA-level jobs or because the negative signals of ‘late’ attainment counteract any positive effect of pre-BA experience.
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