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

  • Susana Iranzo

    (Universitat Rovira Virgili)

  • Giovanni Peri

    (University of California, Davis, and NBER)

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/pdf/10.1162/rest.91.2.420
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Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 91 (2009)
Issue (Month): 2 (May)
Pages: 420-431

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Handle: RePEc:tpr:restat:v:91:y:2009:i:2:p:420-431
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