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Local Labor Markets and Human Capital Investments

Author

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  • Russell Weinstein

Abstract

I study whether human capital investments are based on local rather than national demand, using two positive and two negative shocks with differential local effects: the dot-com crash, the fracking boom, the 2008 financial crisis, and the shock making Delaware a financial headquarters. I find impacts on the share of sector-relevant degrees awarded following these shocks, on average across the United States. However, universities in areas more exposed to sectoral shocks experience greater changes in sector-relevant majors. Differential impacts on major choice at the most exposed universities account for 15–45 percent of the overall national effect on sector-relevant degrees.

Suggested Citation

  • Russell Weinstein, 2022. "Local Labor Markets and Human Capital Investments," Journal of Human Resources, University of Wisconsin Press, vol. 57(5), pages 1498-1525.
    • Handle: RePEc:uwp:jhriss:v:57:y:2022:i:5:p:1498-1525
    Note: DOI: 10.3368/jhr.58.1.1119-10566R2
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    File URL: http://jhr.uwpress.org/cgi/reprint/57/5/1498
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    Citations

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    Cited by:

    1. Furtado, Delia & Kong, Haiyang, 2021. "How Do Low-Skilled Immigrants Adjust to Chinese Import Shocks? Evidence Using English Language Proficiency," IZA Discussion Papers 14152, IZA Network @ LISER.
    2. Weinstein, Russell, 2021. "Graduating from a Less Selective University during a Recession: Evidence from Mobility Report Cards and Employer Recruiting," IZA Discussion Papers 14462, IZA Network @ LISER.
    3. Leibing, Andreas, 2026. "Skill Substitution, Expectations, and the Business Cycle," EconStor Preprints 335943, ZBW - Leibniz Information Centre for Economics.
    4. Shimeng Liu & Weizeng Sun & John V. Winters, 2019. "Up In Stem, Down In Business: Changing College Major Decisions With The Great Recession," Contemporary Economic Policy, Western Economic Association International, vol. 37(3), pages 476-491, July.
    5. Aalto, Aino-Maija & Müller, Dagmar & Tilley, J. Lucas, 2023. "From epidemic to pandemic: Effects of the COVID-19 outbreak on high school program choices in Sweden," Labour Economics, Elsevier, vol. 82(C).
    6. Andrew Weaver, 2021. "Hiring Frictions in a Regulated Occupation: Evidence from US Laboratories," British Journal of Industrial Relations, London School of Economics, vol. 59(3), pages 899-927, September.
    7. Batistich, Mary Kate & Bond, Timothy N. & Linde, Sebastian & Mumford, Kevin J., 2024. "Statistical Discrimination and Optimal Mismatch in College Major Selection," IZA Discussion Papers 17237, IZA Network @ LISER.
    8. Tucker Smith, 2024. "Do Human Capital Adjustments Protect Youths from Structural Change?," Working Papers 2411, Federal Reserve Bank of Dallas.
    9. Weinstein, Russell, 2018. "Dynamic responses to labor demand shocks: Evidence from the financial industry in Delaware," Journal of Urban Economics, Elsevier, vol. 106(C), pages 27-45.
    10. Ersoy, Fulya Y., 2020. "The effects of the great recession on college majors," Economics of Education Review, Elsevier, vol. 77(C).
    11. Huttunen, Kristiina & Riukula, Krista, 2024. "Parental job loss and children’s career choices," Labour Economics, Elsevier, vol. 90(C).
    12. Bütikofer, Aline & Dalla-Zuanna, Antonio & Salvanes, Kjell G., 2025. "Natural resources, demand for skills, and schooling choices," Journal of Environmental Economics and Management, Elsevier, vol. 133(C).
    13. Weinstein, Russell, 2017. "Geography and Employer Recruiting," IZA Discussion Papers 11224, IZA Network @ LISER.
    14. Aalto, Aino-Maija & Müller, Dagmar & Tilley, J. Lucas, 2021. "From Epidemic to Pandemic: Did the COVID-19 Outbreak Affect High School Program Choices in Sweden?," Working Paper Series 1420, Research Institute of Industrial Economics.
    15. Johnathan G. Conzelmann & Steven W. Hemelt & Brad J. Hershbein & Shawn Martin & Andrew Simon & Kevin M. Stange, 2025. "Grads on the go: Measuring college‐specific labor markets for graduates," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 44(3), pages 741-763, June.
    16. Weinstein, Russell, 2018. "Employer screening costs, recruiting strategies, and labor market outcomes: An equilibrium analysis of on-campus recruiting," Labour Economics, Elsevier, vol. 55(C), pages 282-299.
    17. Han, Luyi & Winters, John V., 2020. "Industry Fluctuations and College Major Choices: Evidence from an Energy Boom and Bust," Economics of Education Review, Elsevier, vol. 77(C).

    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I20 - Health, Education, and Welfare - - Education - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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