Very interesting stuff! Perhaps I'm being dense, but it seems to me that the college wage premium is not just the equilibrium price derived from the interaction of supply / demand for "skills". Doesn't it also reflect the magnitude of the skill gap between college and high school students in a given society? Assuming that there are a basket of key skills that a students needs in order to be employable at a given salary (reading, math, teamwork, etc.), in an economy in which the average high school graduate performs at the ~same~ level as the average college graduate on those key skills, presumably the college wage premium goes to zero. Maybe Sweden just has awesome high schools, US has relatively poor ones, and Chile's are, on average, dire?
Very interesting stuff! Perhaps I'm being dense, but it seems to me that the college wage premium is not just the equilibrium price derived from the interaction of supply / demand for "skills". Doesn't it also reflect the magnitude of the skill gap between college and high school students in a given society? Assuming that there are a basket of key skills that a students needs in order to be employable at a given salary (reading, math, teamwork, etc.), in an economy in which the average high school graduate performs at the ~same~ level as the average college graduate on those key skills, presumably the college wage premium goes to zero. Maybe Sweden just has awesome high schools, US has relatively poor ones, and Chile's are, on average, dire?
Thanks David. Keep up the good work!