Higher Education Expansion, Human Capital Externalities and Wages: Italian Evidence within Occupation
AbstractThe Italian system of higher education has recently experienced a process of radical transformation. The so-called 3+2 university reform reflects a big increase in the supply of college graduates that has attracted the attention of policy makers and fostered the debate on the size of human capital externalities. Using the 2009 Italian Labour Force Survey and incorporating a measure of graduate density within each occupation, in this article, we explore whether the social returns to education exceeds the private return and less educated workers gain more than college educated workers from spillovers associated with higher college share in their relative occupation. The OLS results clearly indicate that increases in graduate density have positive effects on wages and that the effect is larger for less educated workers, also controlling for potential confounding factors. However, the concentration of college workers across occupations is such that we may have a potential endogeneity problem. In order to recover a causal interpretation and to isolate the effect of graduate density, we employ an IV strategy exploiting the lagged demographic and occupational structure and the variation in the introduction of 3+2 courses at regional level. Merely, IV estimates largely indicate that the size of spillovers is significantly increased with respect to standard OLS results. Indeed, we estimate that a 1% increase in the college share within occupation raises wages by 0.9-1.3% for male and female, respectively. The effect is further larger for less educated workers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by AlmaLaurea Inter-University Consortium in its series Working Papers with number 39.
Date of creation: Sep 2011
Date of revision:
Contact details of provider:
Web page: http://www.almalaurea.it
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-01 (All new papers)
- NEP-EDU-2011-11-01 (Education)
- NEP-HRM-2011-11-01 (Human Capital & Human Resource Management)
- NEP-LAB-2011-11-01 (Labour Economics)
- NEP-LMA-2011-11-01 (Labor Markets - Supply, Demand, & Wages)
- NEP-URE-2011-11-01 (Urban & Real Estate Economics)
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.:
- Philip Du Caju & Gábor Kátay & Ana Lamo & Daphne Nicolitsas & Steven Poelhekke, 2010.
"Inter-industry wage differentials in EU countries: what do cross-country time varying data add to the picture?,"
121, Bank of Greece.
- Philip Du Caju & Gábor Kátay & Ana Lamo & Daphne Nicolitsas & Steven Poelhekke, 2010. "Inter-Industry Wage Differentials In EU Countries: What Do Cross-Country Time Varying Data Add to the Picture?," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 478-486, 04-05.
- Du Caju, Philip & Kátay, Gábor & Lamo, Ana & Nicolitsas, Daphne & Poelhekke, Steven, 2010. "Inter-industry wage differentials in EU countries: what do cross-country time varying data add to the picture?," Working Paper Series 1182, European Central Bank.
- Philip Du Caju & Gábor Kátay & Ana Lamo & Daphne Nicolitsas & Steven Poelhekke, 2010. "Inter-industry wage differentials in EU countries: what do cross-country time varying data add to the picture?," MNB Working Papers 2010/9, Magyar Nemzeti Bank (the central bank of Hungary).
- Philip Du Caju & Gábor Kátay & Ana Lamo & Daphne Nicolitsas & Steven Poelhekke, 2010. "Inter-industry wage differentials in EU countries : What do cross-country time-varying data add to the picture ?," Working Paper Research 189, National Bank of Belgium.
- Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
- Iourii Manovskii & Gueorgui Kambourov, 2004.
"Occupational Specificity of Human Capital,"
2004 Meeting Papers
197, Society for Economic Dynamics.
- Kathryn L. Shaw, 1984. "A Formulation of the Earnings Function Using the Concept of Occupational Investment," Journal of Human Resources, University of Wisconsin Press, vol. 19(3), pages 319-340.
- Moretti, Enrico, 2004.
"Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data,"
Journal of Econometrics,
Elsevier, vol. 121(1-2), pages 175-212.
- Enrico Moretti, 2002. "Estimating the Social Return to Higher Education: Evidence From Longitudinal and Repeated Cross-Sectional Data," NBER Working Papers 9108, National Bureau of Economic Research, Inc.
- Hansen, Jorgen & Wahlberg, Roger & Faisal, Sharif, 2010.
"Wages and Immigrant Occupational Composition in Sweden,"
Working Papers in Economics
435, University of Gothenburg, Department of Economics.
- Hansen, Jörgen & Wahlberg, Roger & Faisal, Sharif, 2010. "Wages and Immigrant Occupational Composition in Sweden," IZA Discussion Papers 4823, Institute for the Study of Labor (IZA).
- 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.
- Acemoglu, Daron, 1997. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," CEPR Discussion Papers 1707, C.E.P.R. Discussion Papers.
- Acemoglu, D., 1997. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," Working papers 97-14, Massachusetts Institute of Technology (MIT), Department of Economics.
- Barbara Gebicka, 2010. "College Degree Supply and Occupational Allocation of Graduates the Case of the Czech Republic," CERGE-EI Working Papers wp407, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
- Michael Gebel & Friedhelm Pfeiffer, 2010.
"Educational Expansion and Its Heterogeneous Returns for Wage Workers,"
Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften,
Duncker & Humblot, Berlin, vol. 130(1), pages 19-42.
- Gebel, Michael & Pfeiffer, Friedhelm, 2007. "Educational expansion and its heterogeneous returns for wage workers," ZEW Discussion Papers 07-010, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Michael Gebel & Friedhelm Pfeiffer, 2007. "Educational Expansion and Its Heterogeneous Returns for Wage Workers," SOEPpapers on Multidisciplinary Panel Data Research 13, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Jason M. Fletcher & Jody L. Sindelar, 2009. "Estimating Causal Effects of Early Occupational Choice on Later Health: Evidence Using the PSID," NBER Working Papers 15256, National Bureau of Economic Research, Inc.
- Giovanni Peri & Susana Iranzo, 2006.
"Schooling Externalities, Technology and Productivity:Theory and Evidence from U.S. States,"
635, University of California, Davis, Department of Economics.
- Susana Iranzo & Giovanni Peri, 2009. "Schooling Externalities, Technology, and Productivity: Theory and Evidence from U.S. States," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 420-431, May.
- Susana Iranzo & Giovanni Peri, 2006. "Schooling Externalities, Technology and Productivity: Theory and Evidence from U.S. States," NBER Working Papers 12440, National Bureau of Economic Research, Inc.
- Lange, Fabian & Topel, Robert, 2006. "The Social Value of Education and Human Capital," Handbook of the Economics of Education, Elsevier.
- João Carlos Cerejeira da Silva, 2003. "Local Human Capital Externalities or Sorting? Evidence From a Displaced Workers Sample," NIPE Working Papers 9/2003, NIPE - Universidade do Minho.
- Léné, Alexandre, 2011. "Occupational downgrading and bumping down: The combined effects of education and experience," Labour Economics, Elsevier, vol. 18(2), pages 257-269, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.