4.3. The fraction of high types
In this section we consider two alternative values for £. In the baseline model £ = 0.58, which is the fraction of high- school graduates who enrolled in college during the period 1962-2012. Alternatively, one could calibrate this parameter to match some other targets. For example, we could use scores from cognitive tests, such as the Armed Forces Qualification Test (AFQT). By using data from the National Longitudinal Survey of Youth 1979 (NLSY79), we reset £ to 0.42 to match the fraction of individuals with an AFQT score above the mean score in the year 1980, when the test was administered.18 Alternatively, using U.S. Census Bureau data, £1 could be set to 0.225 to match the fraction of Americans with a college degree calculated over the period 1962-2012. ๒ both cases, £ = 0.42 and £1 = 0.225, the remaining parameters of the model are re¬calibrated following the procedure described in Section 2.2, except for n.