IDEAS home Printed from https://ideas.repec.org/a/sae/inrsre/v32y2009i1p65-91.html
   My bibliography  Save this article

Assessing the Effectiveness of Human Capital Investments on the Regional Unemployment Rate in the United States: 1990 and 2000

Author

Listed:
  • Adela Nistor

    (Brock University, St. Catharines adelanistor@alumni.purdue.edu)

Abstract

This article evaluates the effect of human capital investment—for example, expenditures on education, training, and employment—on regional unemployment rates in the United States. State-level unemployment rates are estimated using the spatial lag fixed effects model with spatial correlation of regional unemployment rates for 1990 and 2000. The results show that unemployment rates can be decreased by a policy of state-level human capital investment. A $100 per capita human capital investment in a state is expected to decrease the unemployment rate by 0.63 percent. Human capital investment has a negative impact on a state's unemployment as long as the yearly average state net migration rate is greater than −1.6 percent. A maximum of 1.6 percent of a state's population can out-migrate on average in a year for human capital expenditures to be associated with a decrease in the state's unemployment rate. If a state's net migration rate is less than −1.6 percent of its population, human capital expenditures have a positive effect on unemployment.

Suggested Citation

  • Adela Nistor, 2009. "Assessing the Effectiveness of Human Capital Investments on the Regional Unemployment Rate in the United States: 1990 and 2000," International Regional Science Review, , vol. 32(1), pages 65-91, January.
    • Handle: RePEc:sae:inrsre:v:32:y:2009:i:1:p:65-91
    DOI: 10.1177/0160017608325594
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0160017608325594
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0160017608325594?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Nicolaas Groenewold, 1997. "Does Migration Equalise Regional Unemployment Rates? Evidence From Australia," Papers in Regional Science, Wiley Blackwell, vol. 76(1), pages 1-20, January.
    2. Edward B. Montgomery, 1993. "Pattern in Regional Labor Market Adjustment: The United States vs. Japan," NBER Working Papers 4414, National Bureau of Economic Research, Inc.
    3. Lawrence H. Summers, 1986. "Why is the Unemployment Rate So Very High near Full Employment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 17(2), pages 339-396.
    4. Munich, Daniel & Svejnar, Jan, 2007. "Unemployment in East and West Europe," Labour Economics, Elsevier, vol. 14(4), pages 681-694, August.
    5. Molho, Ian, 1995. "Migrant Inertia, Accessibility and Local Unemployment," Economica, London School of Economics and Political Science, vol. 62(245), pages 123-132, February.
    6. Phillip B. Levine, 1993. "Spillover Effects between the Insured and Uninsured Unemployed," ILR Review, Cornell University, ILR School, vol. 47(1), pages 73-86, October.
    7. Helms, L Jay, 1985. "The Effect of State and Local Taxes on Economic Growth: A Time Series-Cross Section Approach," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 574-582, November.
    8. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 239-253.
    9. Burridge, Peter & Gordon, Ian Richard, 1981. "Unemployment in the British Metropolitan Labour Areas," Oxford Economic Papers, Oxford University Press, vol. 33(2), pages 274-297, July.
    10. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    11. Sander, William & Schaeffer, Peter V., 1991. "Schooling and urban employment growth," Journal of Economics and Business, Elsevier, vol. 43(1), pages 69-77, February.
    12. Greenwood, Michael J, 1975. "Research on Internal Migration in the United States: A Survey," Journal of Economic Literature, American Economic Association, vol. 13(2), pages 397-433, June.
    13. Metcalf, David, 1975. "Urban Unemployment in England," Economic Journal, Royal Economic Society, vol. 85(339), pages 578-589, September.
    14. repec:pri:indrel:dsp01bz60cw25r is not listed on IDEAS
    15. Anselin, Luc & Bera, Anil K. & Florax, Raymond & Yoon, Mann J., 1996. "Simple diagnostic tests for spatial dependence," Regional Science and Urban Economics, Elsevier, vol. 26(1), pages 77-104, February.
    16. Ben-Porath, Yoram, 1973. "Labor-Force Participation Rates and the Supply of Labor," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 697-704, May-June.
    17. Ron Martin & Peter Sunley, 1998. "Slow Convergence? The New Endogenous Growth Theory and Regional Development," Economic Geography, Taylor & Francis Journals, vol. 74(3), pages 201-227, July.
    18. Anselin, Luc & Hudak, Sheri, 1992. "Spatial econometrics in practice : A review of software options," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 509-536, September.
    19. Holzer, Harry J, 1991. "Employment, Unemployment and Demand Shifts in Local Labor Markets," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 25-32, February.
    20. Pissarides, Christopher A & McMaster, Ian, 1990. "Regional Migration, Wages and Unemployment: Empirical Evidence and Implications for Policy," Oxford Economic Papers, Oxford University Press, vol. 42(4), pages 812-831, October.
    21. Stephen T. Marston, 1985. "Two Views of the Geographic Distribution of Unemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(1), pages 57-79.
    22. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
    23. J. Paul Elhorst, 1996. "A Regional Analysis of Labour Force Participation Rates across the Member States of the European Union," Regional Studies, Taylor & Francis Journals, vol. 30(5), pages 455-465.
    24. A. P. Thirlwall, 1966. "Regional Unemployment As A Cyclical Phenomenon1," Scottish Journal of Political Economy, Scottish Economic Society, vol. 13(2), pages 205-219, June.
    25. David Metcalf, 1975. "Urban Unemployment in England," Working Papers 442, Princeton University, Department of Economics, Industrial Relations Section..
    26. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mihaela Simionescu & Mirel Daniel Simionescu, 2017. "The Connection between Foreign Direct Investment and Unemployment Rate in the United States," Working papers Globalization - Economic, Social and Moral Implications, April 2017 18, Research Association for Interdisciplinary Studies.
    2. Holmes, Mark J. & Otero, Jesús & Panagiotidis, Theodore, 2013. "Modelling the behaviour of unemployment rates in the US over time and across space," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(22), pages 5711-5722.
    3. Torben Schmidt & Peter Jensen, 2013. "Foreign labor and regional labor markets: aggregate and disaggregate impact on growth and wages in Danish regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(3), pages 809-840, June.
    4. Thomas A. Garrett & Russell M. Rhine, 2011. "Economic freedom and employment growth in U.S. states," Review, Federal Reserve Bank of St. Louis, vol. 93(Jan), pages 1-18.
    5. Katharina Pijnenburg & Konstantin A. Kholodilin, 2014. "Do Regions with Entrepreneurial Neighbours Perform Better? A Spatial Econometric Approach for German Regions," Regional Studies, Taylor & Francis Journals, vol. 48(5), pages 866-882, May.
    6. Naknok, Sakchai, 2016. "The Labour Attributes of Demand in the ASEAN Economic Community," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 23(2), December.
    7. John V. Winters, 2013. "Human capital externalities and employment differences across metropolitan areas of the USA," Journal of Economic Geography, Oxford University Press, vol. 13(5), pages 799-822, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elhorst, J. Paul, 2000. "The Mystery Of Regional Unemployment Differentialsa Survey Of Theoretical And Empirical Explanations," ERSA conference papers ersa00p60, European Regional Science Association.
    2. J. Paul Elhorst, 2003. "The Mystery of Regional Unemployment Differentials: Theoretical and Empirical Explanations," Journal of Economic Surveys, Wiley Blackwell, vol. 17(5), pages 709-748, December.
    3. repec:dgr:rugsom:00c06 is not listed on IDEAS
    4. Maria Francesca Cracolici & Miranda Cuffaro & Peter Nijkamp, 2007. "Geographical Distribution of Unemployment: An Analysis of Provincial Differences in Italy," Growth and Change, Wiley Blackwell, vol. 38(4), pages 649-670, December.
    5. Nistor, Adela P., 2007. "Implications of Human Capital Public Investments for Regional Unemployment in Indiana," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 37(3), pages 1-8.
    6. Sarantis LOLOS & Evangelia PAPAPETROU, 2012. "Unemployment disparities and persistence Assessing the evidence from Greek regions, 1981-2008," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 12(1), pages 69-90.
    7. Alpay Filiztekin, 2009. "Regional unemployment in Turkey," Papers in Regional Science, Wiley Blackwell, vol. 88(4), pages 863-878, November.
    8. Piotr Ciżkowicz & Michał Kowalczuk & Andrzej Rzońca, 2016. "Heterogeneous determinants of local unemployment in Poland," Post-Communist Economies, Taylor & Francis Journals, vol. 28(4), pages 487-519, October.
    9. Tangian, Andranik S., 2005. "Composite indicator of German regional policy and its use for optimizing subsidies to regional labour markets," WSI Working Papers 138, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
    10. Bedi, Arjun Singh & Edwards, John H. Y., 2002. "The impact of school quality on earnings and educational returns--evidence from a low-income country," Journal of Development Economics, Elsevier, vol. 68(1), pages 157-185, June.
    11. Vicente Rios Ibañez, 2014. "What drives regional unemployment convergence?," ERSA conference papers ersa14p924, European Regional Science Association.
    12. Vassilis Tselios, 2008. "Income and educational inequalities in the regions of the European Union: Geographical spillovers under welfare state restrictions," Papers in Regional Science, Wiley Blackwell, vol. 87(3), pages 403-430, August.
    13. Mark D. Partridge & Dan S. Rickman & M. Rose Olfert & Ying Tan, 2015. "When Spatial Equilibrium Fails: Is Place-Based Policy Second Best?," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1303-1325, August.
    14. Fendel Tanja, 2016. "Migration and Regional Wage Disparities in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(1), pages 3-35, February.
    15. Andrew Figura, 2003. "The effect of restructuring on unemployment," Finance and Economics Discussion Series 2003-56, Board of Governors of the Federal Reserve System (U.S.).
    16. Andrea Bassanini & Stefano Scarpetta, 2003. "The Driving Forces of Economic Growth: Panel Data Evidence for the OECD Countries," OECD Economic Studies, OECD Publishing, vol. 2001(2), pages 9-56.
    17. Dasgupta,Basab & Lall,Somik V. & Lozano Gracia,Nancy, 2014. "Urbanization and housing investment," Policy Research Working Paper Series 115004, The World Bank.
    18. José Ignacio Uribe & Carlos Enrique Castellar Palma, 2000. "La Tasa de Retorno de la Educación en Presencia de Externalidades Pecuniarias Endógenas," Documentos de Trabajo 3089, Universidad del Valle, CIDSE.
    19. Hubert Jayet, 1996. "L'analyse économique des migrations, une synthèse critique," Revue Économique, Programme National Persée, vol. 47(2), pages 193-226.
    20. Wouter Vermeulen & Jos Van Ommeren, 2009. "Compensation of Regional Unemployment in Housing Markets," Economica, London School of Economics and Political Science, vol. 76(301), pages 71-88, February.
    21. Jinzhao Chen, 2015. "Interprovincial Competitiveness and Economic Growth: Evidence from Chinese Provincial Data (1992–2008)," Pacific Economic Review, Wiley Blackwell, vol. 20(3), pages 388-414, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:inrsre:v:32:y:2009:i:1:p:65-91. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.