Changing parental characteristics and aggregate educational attainment∗

Between 1968 and 2013, two striking changes occurred in the characteristics of US parents. First, the share of households headed by a single parent grew from 19% to 40%. Second, the share of households in which at least one parent has a fouryear college degree grew from 17% to 45%, with most of the increase coming from dual parent households. We first conduct simple accounting exercises to show that each of these trends has substantially impacted the aggregate college graduation rate. We then construct a general equilibrium model of intergenerational human capital investment in which households differ by number and education of parents. Consistent with historical data, equilibrium college graduation rates for children from high-education dual-parent households are high and elastic with respect to the college wage premium, while graduation rates for children from low-education, single-parent households are low and inelastic with respect to the college premium. Our analysis suggests that further increases in the college wage premium would increase college attainment for children from one large class of households (higheducation, dual-parent), but not increase rates for children from another large class (low-education, single-parent). JEL Classification: J12, J24, E24, E6