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Education Spillovers within the Workplace

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  • Bentsen, Kristian Hedeager

    (University of Copenhagen)

  • Munch, Jakob R.

    (University of Copenhagen)

  • Schaur, Georg

    (University of Tennessee)

Abstract

Education policies depend in part on the presence of externalities, but very little evidence exists to confirm the existence of such externalities. In this paper we investigate if there are spillover effects from education within peer groups at the workplace. We estimate the effect of increasing the share of higher educated workers in close peer groups on wages, using a rich data source linking workers to workplaces and specific occupations. Our empirical approach accounts for the endogenous sorting of workers into peer groups and workplaces, and, at the same time avoids the reflection problem. In our main specification we find statistically significant but economically small peer effects across all occupations. The magnitude of the effect differs across length and type of education, as well as across occupations and peer group- and workplace size.

Suggested Citation

  • Bentsen, Kristian Hedeager & Munch, Jakob R. & Schaur, Georg, 2018. "Education Spillovers within the Workplace," IZA Discussion Papers 12054, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp12054
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    More about this item

    Keywords

    match worker-firm data; peer effects; education externality;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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