In this paper, we develop an equilibrium model of the college choice decision so as to assess the returns to college for infra-marginal individuals. Workers are heterogeneous in the absolute advantage, their comparative advantage, and their cost of going to college. Occupations differ in their returns to college education. Individuals choose their education level, their schooling effort and their subsequent occupation. We discipline key model elasticity parameters using a variety of micro data strategies. In particular, we use how education choices respond to local labor demand shocks as a way to pin down how inframarginal individuals responds to changes in the return to college. We show the model matches well a variety of untargeted moments including recent estimates of the income gains accrued to marginal individuals from attending college. We then use the model to assess a variety of policy proposals designed to encourage college attendance by reducing college costs.
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Topic: “The Inframarginal Returns to College”
Start Time: February 4, 2026, 12:30 PM PT
