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Schooling Supply and the Structure of Production: Evidence from US States 1950-1990

  • Antonio Ciccone
  • Giovanni Peri

We find that over the period 1950-1990, US states absorbed increases in the supply of schooling due to tighter compulsory schooling and child labor laws mostly through within-industry increases in the schooling intensity of production. Shifts in the industry composition towards more schooling-intensive industries played a less important role. To try and understand this finding theoretically, we consider a free trade model with two goods/industries, two skill types, and many regions that produce a fixed range of differentiated varieties of the same goods. We find that a calibrated version of the model can account for shifts in schooling supply being mostly absorbed through within-industry increases in the schooling intensity of production even if the elasticity of substitution between varieties is substantially higher than estimates in the literature.

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Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 595.

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Date of creation: Nov 2011
Date of revision:
Handle: RePEc:bge:wpaper:595
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  1. Antonio Ciccone & Giovanni Peri, 2004. "Long-run substitutability between more and less educated workers: Evidence from U.S. States 1950-1990," Economics Working Papers 764, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Ann Huff Stevens & Marianne Page & Philip Oreopoulos, 2005. "The Intergenerational Effects of Compulsory Schooling," Working Papers 519, University of California, Davis, Department of Economics.
  3. repec:oup:restud:v:76:y:2009:i:2:p:629-668 is not listed on IDEAS
  4. Giovanni Peri & Chad Sparber, 2009. "Task Specialization, Immigration and Wages," Working Papers 91, University of California, Davis, Department of Economics.
  5. Albert Saiz, 2003. "Immigration and housing rents in American cities," Working Papers 03-12, Federal Reserve Bank of Philadelphia.
  6. Joshua Angrist & Alan Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," Working Papers 653, Princeton University, Department of Economics, Industrial Relations Section..
  7. David Card & Ethan Lewis, 2005. "The Diffusion of Mexican Immigrants During the 1990s: Explanations and Impacts," CReAM Discussion Paper Series 0504, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  8. Paolo Epifani & Gino Gancia, 2005. "Openness, government size and the terms of trade," Economics Working Papers 915, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2008.
  9. repec:tpr:qjecon:v:107:y:1992:i:1:p:35-78 is not listed on IDEAS
  10. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
  11. Daron Acemoglu & Jaume Ventura, 2001. "The World Income Distribution," NBER Working Papers 8083, National Bureau of Economic Research, Inc.
  12. Krugman, Paul, 2008. "Increasing returns," Nobel Prize in Economics documents 2008-3, Nobel Prize Committee.
  13. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," NBER Working Papers 8460, National Bureau of Economic Research, Inc.
  14. Patricia Cortes, 2008. "The Effect of Low-Skilled Immigration on U.S. Prices: Evidence from CPI Data," Journal of Political Economy, University of Chicago Press, vol. 116(3), pages 381-422, 06.
  15. James Harrigan, 1996. "Technology, factor supplies, and international specialization: estimating the neoclassical model," Staff Reports 15, Federal Reserve Bank of New York.
  16. Christian Dustmann & Albrecht Glitz, 2015. "How Do Industries and Firms Respond to Changes in Local Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 33(3), pages 711 - 750.
  17. Francesco Caselli & Wilbur John Coleman II, 2006. "The World Technology Frontier," American Economic Review, American Economic Association, vol. 96(3), pages 499-522, June.
  18. Lawrence F. Katz & Kevin M. Murphy, 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," NBER Working Papers 3927, National Bureau of Economic Research, Inc.
  19. Ciccone, Antonio & Papaioannou, Elias, 2005. "Human Capital, the Structure of Production, and Growth," CEPR Discussion Papers 5354, C.E.P.R. Discussion Papers.
  20. González, Libertad & Ortega, Francesc, 2011. "How do very open economies adjust to large immigration flows? Evidence from Spanish regions," Labour Economics, Elsevier, vol. 18(1), pages 57-70, January.
  21. Hartog,Joop & Maassen van den Brink,Henriëtte (ed.), 2009. "Human Capital," Cambridge Books, Cambridge University Press, number 9780521117562.
  22. Davis, Donald R. & David E. Weinstein & Scott C. Bradford & Kazushige Shimpo, 1997. "Using International and Japanese Regional Data to Determine When the Factor Abundance Theory of Trade Works," American Economic Review, American Economic Association, vol. 87(3), pages 421-46, June.
  23. Hanson, Gordon H. & Slaughter, Matthew J., 2002. "Labor-market adjustment in open economies: Evidence from US states," Journal of International Economics, Elsevier, vol. 57(1), pages 3-29, June.
  24. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-77, March.
  25. repec:oup:qjecon:v:126:y:2011:i:2:p:1029-1069 is not listed on IDEAS
  26. Lutz Hendricks, 2010. "Cross-country variation in educational attainment: structural change or within-industry skill upgrading?," Journal of Economic Growth, Springer, vol. 15(3), pages 205-233, September.
  27. John Romalis, 2004. "Factor Proportions and the Structure of Commodity Trade," American Economic Review, American Economic Association, vol. 94(1), pages 67-97, March.
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