Data and Code for Risk, the College Premium, and Aggregate Human Capital Investment

Despite increases in the college earnings premium to persistently high<br>levels, investment in college education remains low. We can understand this<br>apparent puzzle by considering the risk of attending college, and in<br>particular the possibility of failing to graduate. Students with a<br>reasonable probability of completing college already enroll, and for those<br>who do not enroll, the low chance of completion blunts the impact of the<br>rising college premium. In the absence of improved college readiness, our<br>quantitative results suggest that continuing long-standing trends in<br>skill-biased technological change can be expected primarily to increase<br>earnings inequality, rather than college attainment.<br>