The schooling response to a sustained increase in low-skill wages: evidence from Spain 1989-2009
The response of human capital accumulation to changes in the anticipated returns to schooling determines the type of skills supplied to the labor market, the productivity of future cohorts, and the evolution of inequality. Unlike the US, the UK or Germany, Spain has experienced since 1995 a drop in the returns to medium and tertiary education and, with a lag, a drop in schooling attainment of recent cohorts, providing the opportunity to estimate the response of different forms of human capital acquisition to relative increases in low-skill wages. We measure the expected returns to schooling using skill-specific wages bargained in collective agreements at the province-industry level. We argue that those wages are easily observable by youths and relatively insensitive to shifts in the supply of workers. Our preferred estimates suggest that a 10% increase in the ratio of wages of unskilled workers to the wages of mid-skill workers increases the fraction of males completing at most compulsory schooling by between 2 and 5 percentage points. The response is driven by males from less educated parents and comes at the expense of students from the academic high school track rather than the vocational training track.
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.:
- Dan A. Black & Terra G. McKinnish & Seth G. Sanders, 2005.
"Tight Labor Markets and the Demand for Education: Evidence from the Coal Boom and Bust,"
Cornell University, ILR School, vol. 59(1), pages 3-16, October.
- Dan A. Black & Terra G. McKinnish & Seth G. Sanders, 2005. "Tight labor markets and the demand for education: Evidence from the coal boom and bust," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 59(1), pages 3-16, October.
- Florentino Felgueroso & Manuel Hidalgo & SergiJiménez Martín, 2010. "Explaining the fall of the skill wage premium in Spain," Working Papers 2010-19, FEDEA.
- Dellas, Harris & Sakellaris, Plutarchos, 1996.
"On the cyclicality of schooling: Theory and evidence,"
Discussion Papers (IRES - Institut de Recherches Economiques et Sociales)
1997002, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Harris Dellas & Plutarchos Sakellaris, 2003. "On the cyclicality of schooling: theory and evidence," Oxford Economic Papers, Oxford University Press, vol. 55(1), pages 148-172, January.
- Pijoan-Mas, Josep & Sánchez-Marcos, Virginia, 2009.
"Spain is Different: Falling Trends of Inequality,"
CEPR Discussion Papers
7489, C.E.P.R. Discussion Papers.
- Carneiro, Pedro & Lee, Sokbae, 2010.
"Trends in Quality-Adjusted Skill Premia in the United States, 1960-2000,"
IZA Discussion Papers
5295, Institute for the Study of Labor (IZA).
- Pedro Carneiro & Sokbae Lee, 2011. "Trends in Quality-Adjusted Skill Premia in the United States, 1960-2000," American Economic Review, American Economic Association, vol. 101(6), pages 2309-49, October.
- Pedro Carneiro & Sokbae 'Simon' Lee, 2009. "Trends in quality-adjusted skill premia in the United States, 1960-2000," CeMMAP working papers CWP02/09, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Eric D. Gould & Bruce A. Weinberg & David B. Mustard, 2002. "Crime Rates And Local Labor Market Opportunities In The United States: 1979-1997," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 45-61, February.
- Beffy, Magali & Fougère, Denis & Maurel, Arnaud, 2009.
"Choosing the Field of Study in Post-Secondary Education: Do Expected Earnings Matter?,"
IZA Discussion Papers
4127, Institute for the Study of Labor (IZA).
- Magali Beffy & Denis Fougère & Arnaud Maurel, 2012. "Choosing the Field of Study in Postsecondary Education: Do Expected Earnings Matter?," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 334-347, February.
- Magali BEFFY & Denis FOUGERE & Arnaud MAUREL, 2009. "Choosing the Field of Study in Post-Secondary Education : Do Expected Earnings Matter ?," Working Papers 2009-14, Centre de Recherche en Economie et Statistique.
- Joseph G. Altonji & Prashant Bharadwaj & Fabian Lange, 2008.
"Changes in the Characteristics of American Youth: Implications for Adult Outcomes,"
NBER Working Papers
13883, National Bureau of Economic Research, Inc.
- Joseph G. Altonji & Prashant Bharadwaj & Fabian Lange, 2012. "Changes in the Characteristics of American Youth: Implications for Adult Outcomes," Journal of Labor Economics, University of Chicago Press, vol. 30(4), pages 783 - 828.
- Ainhoa Aparicio, 2010.
"High-School Dropouts and Transitory Labor Market Shocks: The Case of the Spanish Housing Boom,"
Carlo Alberto Notebooks
158, Collegio Carlo Alberto.
- Aparicio Fenoll, Ainhoa, 2010. "High-School Dropouts and Transitory Labor Market Shocks: The Case of the Spanish Housing Boom," IZA Discussion Papers 5139, Institute for the Study of Labor (IZA).
- Charles T. Clotfelter & Michael Rothschild, 1993. "Studies of Supply and Demand in Higher Education," NBER Books, National Bureau of Economic Research, Inc, number clot93-1, 07.
When requesting a correction, please mention this item's handle: RePEc:bde:wpaper:1208. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mar�a Beiro. Electronic Dissemination of Information Unit. Research Department. Banco de Espa�a)
If references are entirely missing, you can add them using this form.