420PART SIXTHE ECONOMICS OF LABOR MARKETSCASE STUDYTHE INCREASING VALUE OF SKILLS“The rich get richer, and the poor get poorer.” Like many adages, this one is notalways true, but recently it has been. Many studies have documented that theearnings gap between workers with high skills and workers with low skills hasincreased over the past two decades.Table 19-1 presents data on the average earnings of college graduates and ofhigh school graduates without any additional education. These data show theincrease in the financial reward from education. In 1978, a man on averageearned 66 percent more with a college degree than without one; by 1998, thisfigure had risen to 118 percent. For woman, the reward for attending collegerose from a 55 percent increase in earnings to a 98 percent increase. The incen-tive to stay in school is as great today as it has ever been.Why has the gap in earnings between skilled and unskilled workers risen inrecent years? No one knows for sure, but economists have proposed two hy-
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