Relative to Whom? Comment on “Relative Education and the Advantage of a College Degree”

Abstract

To understand the relative advantage of a bachelor’s degree, we must consider the question: relative to whom? Using the Current Population Survey Annual Social and Economic Supplement, Horowitz (2018) argues that educational expansion between 1971 and 2010 decreased college graduates’ skill usage and eroded their advantages relative to individuals without a postsecondary degree. However, the comparison group—individuals without a postsecondary degree—is inconsistently defined over time due to a change to the CPS in 1992; this group also includes individuals without a high school degree, high school graduates, and people with some college but no degree—three groups that have heterogeneous labor market experiences. I replicate Horowitz’s analysis and repeat it using two alternative education categorization schemes that address these limitations. I show that college graduates’ absolute and relative advantages in skill usage depend substantially on how we measure education. Notably, I find that college graduates maintain persistent relative advantages in skill usage when compared to high school graduates and individuals with some college, even as education expands. Although no classification system perfectly accounts for the full variation of the population, my findings demonstrate that researchers must carefully define key variables and comparison groups, especially when considering relative effects.