A model where choice of occupation is sequential is applied to college graduates from the National Longitudinal Study of the High School Class of 1972 to investigate how higher moments of occupational earnings distributions influence initial field of work. Individual specific life‐cycle earnings projections that incorporate option values of occupational mobility are generated, and the relationship between these pay measures and choice of initial occupation is explored within a multinomial logit framework. The findings indicate a strong positive relationship between these earnings predictions and the likelihood that college graduates enter an occupation.

Rapidly growing costs of elementary and secondary education are studied in the context of the rising value of women's time. The dramatic increase in direct costs of education per student in the past 3 decades is empirically linked to increasing demand and utilization of teacher and staff inputs, attributable to growing market opportunities for women and changes in the structure of families. On the supply side, the "flexibility option" that female teachers who take temporary leaves do not suffer subsequent wage loss upon reentry, is shown to be an important attraction of the teaching profession to women.