In this paper, the authors develop a general equilibrium overlapping generations model with human capital to analyze the evolution of the wage premium associated with university education and lifetime earnings profiles in the United States between 1940 and 2020. The model incorporates choices related to schooling and on-the-job training, along with aggregate economic shocks and cohort-specific trends in initial skill endowments and learning abilities. The estimated model replicates the W-shaped pattern of the college wage premium as well as the flattening and subsequent steepening of earnings over the life cycle. The results show that variations in labor efficiency—rather than shifts in relative skill prices—are the primary drivers of these dynamics. The authors also highlight the significant role of declining initial skills and learning capacities among more recent cohorts. However, adjustments in educational attainment and relative wages help offset these disadvantages. Without such market mechanisms, the lifetime earnings gap between individuals with and without university degrees would widen substantially, and the college premium would double.