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A re-examination of the social returns to education: Evidence from U.S. cities

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  • Sand, Benjamin M.

Abstract

This paper re-examines the impact of city educational composition on wages, often interpreted as human capital externalities. Using U.S. Census data, I find large, positive spillovers from college education in the 1980s, as documented by Moretti (2004a). In contrast, in the 1990s, the supply of skilled workers has no impact on average wages and may even negatively impact the wages of low-skill workers. These findings invite reinterpretation of previous studies on social returns to education, as shifts in the impact of city education composition on wages are not consistent with standard models of technological human capital externalities.

Suggested Citation

  • Sand, Benjamin M., 2013. "A re-examination of the social returns to education: Evidence from U.S. cities," Labour Economics, Elsevier, vol. 24(C), pages 97-106.
  • Handle: RePEc:eee:labeco:v:24:y:2013:i:c:p:97-106
    DOI: 10.1016/j.labeco.2013.07.001
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    References listed on IDEAS

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    1. Antonio Ciccone & Giovanni Peri, 2006. "Identifying Human-Capital Externalities: Theory with Applications," Review of Economic Studies, Oxford University Press, vol. 73(2), pages 381-412.
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    4. Colm Harmon & Hessel Oosterbeek, 2000. "The Returns to Education: A Review of Evidence, Issues and Deficiencies in the Literature," CEE Discussion Papers 0005, Centre for the Economics of Education, LSE.
    5. 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.
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    7. Dan Black & Natalia Kolesnikova & Lowell Taylor, 2009. "Earnings Functions When Wages and Prices Vary by Location," Journal of Labor Economics, University of Chicago Press, vol. 27(1), pages 21-47, January.
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    10. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
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    12. Jeremy B. Rudd, 2000. "Empirical evidence on human capital spillovers," Finance and Economics Discussion Series 2000-46, Board of Governors of the Federal Reserve System (U.S.).
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    Cited by:

    1. Mariana Pereira-López & Isidro Soloaga, 2015. "External returns to higher education in Mexico 2000-2010," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 1-34, May.
    2. Thönnessen, Rasmus, 2014. "Human capital externalities vs. substitution effects as determinants of regional wages: Evidence from German micro data," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100345, Verein für Socialpolitik / German Economic Association.
    3. John V. Winters, 2015. "Do higher levels of education and skills in an area benefit wider society?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 130-130, March.
    4. Chris Bidner & Guillaume Roger & Jessica Moses, 2016. "Investing in Skill and Searching for Coworkers: Endogenous Participation in a Matching Market," American Economic Journal: Microeconomics, American Economic Association, vol. 8(1), pages 166-202, February.

    More about this item

    Keywords

    Wages; Externalities; Spillovers; Education; Local labor markets;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • I2 - Health, Education, and Welfare - - Education

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