Up until the late 1980's, the ratio of earnings of university graduates to the earnings of those who left after secondary school declined.However, during this period equilibrium quantity of employed university graduates also increased.What could explain this outcome?

Question

Quizplus · Accepted Answer

The increase in the equilibrium quantity of employed university graduates, despite the decline in their earnings relative to those with only secondary education, suggests that both the supply and demand for university graduates rose. A rise in supply could lead to lower relative earnings, but an increase in demand would be necessary to also increase the quantity employed.

Up Until the Late 1980's, the Ratio of Earnings of University