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Schooling Externalities, Technology, and Productivity: Theory and Evidence from U.S. States

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Author Info
Susana Iranzo (Universitat Rovira Virgili)
Giovanni Peri (University of California, Davis, and NBER)

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Abstract

The literature on schooling externalities in U.S. cities and states is rather mixed: positive external effects of average education levels are hardly found while positive externalities from the share of college graduates are more often identified. We propose a simple model to reconcile this mixed evidence. Our model predicts positive externalities from increased college education and negligible external effects from high school education. Using compulsory attendance/child labor laws, push-driven immigration of highly educated workers, and the location of land-grant colleges as instruments for schooling attainments, we test and confirm the model predictions with data on U.S. states for the period 1960-2000. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/rest.91.2.420
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Publisher Info
Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 91 (2009)
Issue (Month): 2 (November)
Pages: 420-431
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Handle: RePEc:tpr:restat:v:91:y:2009:i:2:p:420-431

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  1. Angel de la Fuente & Rafael Domenech, 2001. "Schooling Data, Technological Diffusion, and the Neoclassical Model," American Economic Review, American Economic Association, vol. 91(2), pages 323-327, May. [Downloadable!] (restricted)
  2. Janet Currie & Enrico Moretti, 2003. "Mother'S Education And The Intergenerational Transmission Of Human Capital: Evidence From College Openings," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1495-1532, November. [Downloadable!] (restricted)
  3. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March. [Downloadable!] (restricted)
  4. Acemoglu, Daron, 1996. "A Microfoundation for Social Increasing Returns in Human Capital Accumulation," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 779-804, August. [Downloadable!] (restricted)
  5. Caselli, Francesco, 2005. "Accounting for Cross-Country Income Differences," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 9, pages 679-741 Elsevier. [Downloadable!] (restricted)
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  6. Francesco Caselli & Wilbur John Coleman, 2006. "The World Technology Frontier," American Economic Review, American Economic Association, vol. 96(3), pages 499-522, June. [Downloadable!]
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  7. Angel de la Fuente & Rafael Doménech, 2006. "Human Capital in Growth Regressions: How Much Difference Does Data Quality Make?," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 1-36, 03. [Downloadable!] (restricted)
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  8. Antonio Ciccone & Giovanni Peri, 2005. "Long-Run Substitutability Between More and Less Educated Workers: Evidence from U.S. States, 1950-1990," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 652-663, 07. [Downloadable!] (restricted)
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  9. David Card, 1993. "Using Geographic Variation in College Proximity to Estimate the Return to Schooling," Working Papers 696, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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  10. Yeaple, Stephen Ross, 2005. "A simple model of firm heterogeneity, international trade, and wages," Journal of International Economics, Elsevier, vol. 65(1), pages 1-20, January. [Downloadable!] (restricted)
  11. Antonio Ciccone & Giovanni Peri, 2006. "Identifying Human-Capital Externalities: Theory with Applications," Review of Economic Studies, Blackwell Publishing, vol. 73(2), pages 381-412, 04. [Downloadable!] (restricted)
  12. Joshua D. Angrist, 1995. "The Economic Returns to Schooling in the West Bank and Gaza Strip," Working papers 95-5, Massachusetts Institute of Technology (MIT), Department of Economics.
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  13. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January. [Downloadable!] (restricted)
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  14. Mark Bils & Peter J. Klenow, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December. [Downloadable!] (restricted)
  15. repec:fth:prinin:317 is not listed on IDEAS
  16. George J. Borjas, 2003. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1335-1374, November. [Downloadable!] (restricted)
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  17. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June. [Downloadable!] (restricted)
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  18. Acemoglu, Daron, 2002. "Directed Technical Change," Review of Economic Studies, Blackwell Publishing, vol. 69(4), pages 781-809, October.
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  19. Kevin Milligan & Enrico Moretti & Philip Oreopoulos, 2003. "Does Education Improve Citizenship? Evidence from the U.S. and the U.K," NBER Working Papers 9584, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  20. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change And Wage Inequality," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1055-1089, November. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jess Benhabib & Boyan Jovanovic, 2007. "Optimal Migration: A World Perspective," NBER Working Papers 12871, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Susana Iranzo & Giovanni Peri, 2007. "Migration and Trade in a World of Technological Differences: Theory with an Application to Eastern-Western European Integration," NBER Working Papers 13631, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Bert Minne & Marc van der Steeg & Dinand Webbink, 2008. "Skill gaps in the EU: role for education and training policies," CPB Documents 162, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  4. Christopher H. Wheeler & Elizabeth A. La Jeunesse, 2006. "Trends in the distributions of income and human capital within metropolitan areas: 1980-2000," Working Papers 2006-055, Federal Reserve Bank of St. Louis. [Downloadable!]
  5. Shawn Kantor & Alexander Whalley, 2009. "Do Universities Generate Agglomeration Spillovers? Evidence from Endowment Value Shocks," NBER Working Papers 15299, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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