In the benchmark model, we make a speci…c assumption about the distribution of ability i in the function of the disutility cost. To test if the results are robust to the choice of the distribution of ability, I follow Restuccia and Vandenbroucke (2010) to consider a more general Beta distribution of ability. i Beta(A; C), where i 2 [0; 1] and A and C are the two positive parameters governing the shape of the distribution. The uniform distribution I assume in the benchmark model is just a special case of the Beta distribution with A = C = 1. Now there are three parameters in the function of disutility cost DIS(i): b, A, and C: I calibrate these three parameters to match the college enrollment rates in three years over the period 1955-1980.17
Figure 9 shows that with this more general distribution of ability, the results are still quite close to the ones in the benchmark model. The model results are robust to the alternative distributional assumption.
To summarize, the counterfactual experiments show that the rising tuition costs over time have little quantitative in‡uence on the benchmark results. The results are also robust to a more general distribution of the disutility cost. The experiments justify the assumption that the disutility cost of schooling is quite time-invariant.
17In the current version, I calibrate b; A, and C to match the enrollment rate data in 1955, 1961
and 1974, which are the three years for which the benchmark model …ts the data best. The results, however, are not quite sensitive to the years I pick.
1955 1960 1965 1970 1975 1980 30 35 40 45 50 55 60 year per c e nt ag e Data Benchmark Beta distribution
Finally, the experiment testing di¤erent assumptions of expectations provides inter- esting evidence on young women’s changing expectations of future earnings over the period 1955 to 1980.
6
Conclusion
This paper develops a discrete time overlapping generations model with an endoge- nous college-entry decision. The decision is based on the cost-bene…t analysis implied by the standard human capital investment theory. Two key features are exogenous choice-dependent life-cycle wage pro…les and an idiosyncratic disutility cost of a col- lege education. Using this model, I quantitatively examine the driving force behind the dramatic increase in the female college enrollment rate from 1955 to 1980. I …nd that the model works quite well in capturing the rising female college enrollment rate during this period. The rising college wage premium is the major driving force. The results also suggest that the change in expectations of future employment op- portunity and earnings among young women may have played an important role in driving the enrollment rate since the late 1960s and early 1970s.
The recent literature shows that the marriage market may be an important deter- minant in women’s schooling decision.18 Education may also a¤ect women’s fertility
and marriage decisions. This paper does not address these issues. However, it would be an interesting extension to include endogenous marriage and fertility choices in the current model to analyze the interaction among these choices. This extended model surely will provide a platform for understanding not only the changes in women’s college-entry decisions, but also the evolution of the marriage rate and fertility deci- sions over time. I leave that for future research.
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