The Opportunity Cost of a College Education: How Shocks to Local Labor Demand Affect Enrollment and the Gender Gap

This study explores the role of opportunity cost in the decision to attend college and its implications for the gap in enrollment between women and men. I provide new causal evidence that enrollment goes up in response to negative local labor demand shocks and down in response to positive ones. I then use variation in the opportunity cost of attending college to explore whether differences in labor market opportunities contribute to the enrollment gender gap. First, I find evidence that men are more sensitive to local labor demand shocks, suggesting that labor demand has gender-specific components. To isolate these components, I construct measures of gender-specific demand by classifying occupations by gender and education level. I find that there is a high degree of gender segregation by occupation at all education levels, but that most male jobs are low education, while female jobs are distributed more evenly across education levels. I present evidence that demand shocks to low education male jobs predict the gender gap and that the gap would shrink by 20 percent if low education male jobs disappeared. I