College-educated Labor Research Articles

Trends in College–High School Wage Differentials in China: The Role of Cohort-Specific Labor Supply Shift

The wage gap between 4-year college (BA) and high school (HS) graduates narrows down among young workers from 2002 to 2009 in urban China, despite steadily increasing BA–HS wage gaps for older workers during the same time. This period corresponds to the labor market entry of a radically increasing number of college-educated labor stimulated by China’s higher education expansion program initiated in 1999. This study examines how cohort-specific relative supply of college-educated labor affects the cohort-specific college wage premiums and the overall BA–HS wage gaps in the labor market. Incorporating an aggregate labor supply model with imperfect substitution across labor with the same education level but in different age groups, changes in age-group-specific BA–HS wage gaps over time are decomposed into changes in aggregate and age-group-specific relative labor supply and demand factors. Findings suggest that the substantially expanded opportunities to attend college contribute to the falling BA–HS income inequality among young post-expansion cohorts: a 1-percent increase in the relative supply of BA-educated workers within one’s own cohorts depresses cohort-specific BA–HS wage gap by 0.2%. Policies that substantially boost educational attainment for certain cohorts could reduce education-related wage gaps for these cohorts and have spillover effects to the wage structure in the labor market.

Heterogeneous firm responses to increases in high-skilled workers: Evidence from China's college enrollment expansion

Over the past several decades, the returns to college education have steadily increased in many countries of the world despite an increased supply of college graduates. In this paper, using local-labor market data on the composition of the labor force combined with detailed firm-level data covering the period of a large-scale expansion of college enrollment in China, we seek to identify within-firm adjustments to labor market changes. The empirical work is guided by a model in which there are two types of production technologies, characterized by two different types of capitals, one skill-biased and the other labor-biased. The empirical results, consistent with the model and the observed trends in schooling and rates of return, indicate that there were significant adjustments in capital and R&D within-firms in response to an enlarged college-educated labor force.

Higher education and corporate innovation

This paper investigates the impact of higher education on corporate innovation. To establish causality, we exploit a policy-induced exogenous shock in the supply of Chinese college-educated labor starting in 2003. Using a difference-in-differences approach, we find that Chinese firms in skilled industries generate better innovation outcomes as measured by patents and citations than those in unskilled industries. This effect is more pronounced among firms headquartered in a province with more science and engineering college graduates, young firms that are more likely to hire young graduates, and firms located near universities. Moreover, higher education expansion increases a firm's innovative human capital in terms of the number of educated employees and inventors. Finally, we show that technological innovation is a mechanism through which higher education affects productivity growth and, thus, the economy.

THE IMPACT OF MANPOWER EDUCATION AND GOVERNMENT EXPENDITURE ON EDUCATION SECTOR ON ECONOMIC GROWTH OF LABUHANBATU REGENCY

This study is based on the fact that education contributes greatly to economic growth through the improvement of knowledge, skills, attitudes and productivity, so that education is expected to produce quality workforce. This study aims to determine how the impact of education level achieved by the workforce. The level of education achieved by the workforce is distinguished between primary, secondary, and tertiary education. It also aims to find out how the impact of government spending on government education sector on economic growth in Labuhanbatu District during the period of 2002-2015. Data analysis method used in this research is descriptive method, completed by analysis with econometric data analysis with multiple regression model based on production function Y = f (K, L). Regression analysis was performed using Ordinary Least Square (OLS) method. The model used is the model of endogenous economic growth (new growth model). This study uses secondary data obtained from the publication of survey results related to the Statistic Indonesia with time series 2002-2015. Data analysis using multiple linear regression with the help of statistical test of E-view 6.0 application program. The results of this study indicate that all the independent variables have a positive and significant impact on economic growth in Labuhanbatu regency. Estimation results for economic growth obtained R2 of 0.994414. This means that as much as 99.4414 percent of economic growth variables can be explained by the variables of primary school educated workers, high school educated workers, college educated labor, human development index, and government spending in the education sector while the remaining 0, 5586 percent is explained by other variables outside the model. In the end, the variables of elementary school educated labor, high school educated labor, college educated labor, human development index, and government expenditure in the education sector are expected to increase economic activity in order to achieve economic growth and improve the welfare of the community.

THE IMPACT OF MANPOWER EDUCATION AND GOVERNMENT EXPENDITURE ON EDUCATION SECTOR ON ECONOMIC GROWTH OF LABUHANBATU REGENCY

This study is based on the fact that education contributes greatly to economic growth through the improvement of knowledge, skills, attitudes and productivity, so that education is expected to produce quality workforce. This study aims to determine how the impact of education level achieved by the workforce. The level of education achieved by the workforce is distinguished between primary, secondary, and tertiary education. It also aims to find out how the impact of government spending on government education sector on economic growth in Labuhanbatu District during the period of 2002-2015. Data analysis method used in this research is descriptive method, completed by analysis with econometric data analysis with multiple regression model based on production function Y = f (K, L). Regression analysis was performed using Ordinary Least Square (OLS) method. The model used is the model of endogenous economic growth (new growth model). This study uses secondary data obtained from the publication of survey results related to the Statistic Indonesia with time series 2002-2015. Data analysis using multiple linear regression with the help of statistical test of E-view 6.0 application program. The results of this study indicate that all the independent variables have a positive and significant impact on economic growth in Labuhanbatu regency. Estimation results for economic growth obtained R2 of 0.994414. This means that as much as 99.4414 percent of economic growth variables can be explained by the variables of primary school educated workers, high school educated workers, college educated labor, human development index, and government spending in the education sector while the remaining 0, 5586 percent is explained by other variables outside the model. In the end, the variables of elementary school educated labor, high school educated labor, college educated labor, human development index, and government expenditure in the education sector are expected to increase economic activity in order to achieve economic growth and improve the welfare of the community.

Optimal timing of college subsidies: Enrollment, graduation, and the skill premium

The large increase in the skill premium has led many policy makers to propose increasing college subsidies as a strategy to increase college enrollment and reduce inequality. Existing analyses typically assume that there is no distinction between enrollment and graduation, but in fact more than 50% of college enrollees do not graduate. This highlights the need to explicitly model the decision to drop out in assessing the effect of subsidies. I build a general equilibrium model of education choice that features an explicit dropout decision, calibrate it to match key features of the US economy, and use it to evaluate the impact of college subsidies on the supply of college-educated labor. I show that moving to a system in which subsidies are back-loaded—i.e., higher for juniors and seniors than for freshmen and sophomores—will increase the supply of college-educated labor, even holding total subsides constant. In fact, this effect is larger than what would be accomplished by a uniform 50% increase in subsidies.

Higher Education and Corporate Innovation

This paper investigates the impact of higher education on corporate innovation. To establish causality, we exploit a policy-induced exogenous shock in the supply of Chinese college-educated labor starting in 2003. Using a difference-in-differences approach, we find that Chinese firms in skilled industries generate better innovation outcomes as measured by patents and citations than those in unskilled industries. This effect is more pronounced among firms headquartered in a province with more science and engineering college graduates, young firms that are more likely to hire young graduates, and firms located near universities. Moreover, higher education expansion increases a firm’s innovative human capital in terms of the number of educated employees and inventors. Finally, we show that technological innovation is a mechanism through which higher education affects productivity growth and, thus, the economy.

Need Analysis of College-Educated Labor Resources in the Russian Arctic

In the first half of the 20th century due to the changed economic conditions, growing interest of foreign countries and their corporate sector in the Arctic, the implementation of large-scale investment projects in mining and processing of minerals, the use of transport routes in the Russian Arctic, the issue of human resources provision is becoming more topical. The paper presents the requirement analysis of college-educated labor resources in the sub-federal units of the Russian Arctic in the current (until 2020) and medium-term (until 2022) perspective using sociological and analytical methods. Highly qualified personnel and their advanced technical solutions are considered as the main conditions for the adaptation of Arctic communities and economic systems to environmental changes and new requirements of world technological paradigms. The study results can be recommended for the federal and regional executive authorities for formulating policy in the academic space management, targeted college-educated personnel training for the real sector of economy of the Russian Arctic. The paper can be useful for enterprises operating in the Arctic macro-region, for developing a system for monitoring and evaluating staffing needs and introducing such a system into the management of the socio-economic development of the Arctic zone of Russia.

RETURNS TO HUMAN CAPITAL AND WAGE INEQUALITY: THE CASE OF TAIWAN

(ProQuest: ... denotes formulae omitted.)1.INTRODUCTIONTwo recent Taiwan empirical studies reach different conclusions on the effect of return to education and wage inequality. Using Taiwan's Survey of Family Income and Expenditure for the 1978-1996 period, Lin and Orazem (2003, 2004) find that despite the government policy of rapid expansion of a number of higher education institutions since the mid 1980s, the returns to higher education and greater experience are increasing over time, which is mainly due to persistent shifts in relative demand toward skilled labor, i.e. skill-biased technical change. As a result, wage inequality and returns to college-educated workers have risen in Taiwan since 1980. Moreover, the rising share of women in the labor force helped amplify these trends. The stylized fact is that family income inequality in Taiwan has indeed been increasing since 1980 (as shown in Figure 1 of Lin and Orazem, 2004); however, individual wage inequality has actually been decreasing since 1980 despite the increase in the years of schooling as shown in Figure 1.1 Chen and Hsu (2001) also document a decreasing trend in wage differentials between skilled and unskilled workers since 1980 and argue that wage inequality has fallen because of decreasing returns to college-educated labor relative to other educational groups.The returns to human capital seem to play an important role in understanding Taiwan's wage inequality. But, how to reconcile the fact that returns to higher education has an increasing trend while the wage inequality reveals a declining tendency, a phenomenon that contradicted to existing literature?Empirical studies have shown that rates of returns on human capital are around 15%-20% (see, for example, Heckman, 2003). Cross-country studies have also presented that human capital is a critical factor in enhancing productivity, hence affecting a country's long-run growth (for example, Behanbib and Sprigel, 1994). Human capital investment contains the access to new information and knowledge (Thomas et al., 1991) or capability to absorb new information (Schultz, 1975), which in turn enhances productivity. Aside from formal education, which is the major channel for human capital investment, Heckman, Lochner, and Taber (1998) find that about one-third to half of all skill acquisitions are from after school on-the-job training. Education and on-the-job training apparently increase people's productivity and hence the output of the economy. Over time, improvement in labor quality together with economic development also raises workers' wages.As human capital enhances productivity and hence wages, what is the likely relationship between returns to human capital and wage inequality? Experiences from advanced countries show that human capital investment usually increases the wages of skilled workers and thus widens the wage inequality as the countries develop, see e.g., Kats and Murphy (1992) and Autor, Katz, and Kearney (2008). Pereira and Martins (2000) investigate fifteen European countries during a period ranging between 1980 and 1995, finding that in most countries (except Germany and Greece) the dispersion in earnings increases with educational levels suggesting a positive interaction between schooling and ability with respect to earnings. Hartog, Pereira, and Vieira (2001) examine the evolution of the returns to education in Portugal over the 1980s and early 1990s, also presenting that wage inequality expanded in Portugal over the 1980s and the returns to education had an important role in this process. Saavedra (2001) studies three Latin American countries, Argentina, Brazil, and Costa Rica, and finds that wage differentials arising from education increased in Costa Rica while the relative premium to education fell in Argentina and Brazil. Looking at long-run changes of the U.S. wage structure, Goldin and Kats (2007) conclude that wage inequality was mainly driven by educational wage differentials. …

Human Capital and Growth of Industries: Evidence from China's Higher Education Expansion in the Late 1990s

Human capital is indispensable for firms in developing countries to adopt new technologies and improve productivity, especially in industries that employ technologies more complementary to skilled labor, given that new technologies available after the 1970s tend to be skill-biased. Taking advantage of an exogenous surge in college-educated labor force in China starting in 2003 due to a drastic centrally-devised higher education expansion policy starting in 1999 and using a generalized difference-in-differences framework, this paper finds that industries that employ more human-capital intensive technologies experience a larger gain in total factor productivity post-2003 relative to prior years; they also show larger increases in import of advanced capital goods, R&D expenditure, capital intensity, employees with more education and in skilled occupations, and total value-added. The extra productivity gains however are much weaker for domestic private firms than foreign-owned firms.

Merit aid and post-college retention in the state

One goal of state merit-based financial aid programs is to increase the stock of college-educated labor in the state by retaining college-educated persons in the state after college. However, there has been surprisingly little research on whether state merit aid programs are effective at this goal. This paper investigates the effect of state merit aid programs on the post-college location of 24–30year olds. We use decennial census and American Community Survey microdata to consider post-college retention effects in the 25 states that implemented merit aid programs between 1991 and 2004. Our preferred specification implies that strong state merit aid programs on average increase the probability that a college attendee lives in his or her birth state during ages 24–30 by 2.76 percentage points. We also estimate the effect for individual states and find meaningful differences across states in the effect of merit aid programs on in-state post-college retention and explore explanations for these differences.

The effects of HOPE on post-college retention in the Georgia workforce

Research suggests that merit scholarship programs increase college enrollment in states that adopt them but post-college migration may limit the effect these programs have on the stock of college-educated labor in those states. In this paper we consider the effect of Georgia's HOPE Scholarship program on post-college retention, estimating the effect in two ways. First, we use administrative data on student and employment records to examine the effects of the HOPE Scholarship on post-college retention rates in the Georgia workforce for students enrolled in the University System of Georgia (USG). Second, we use data from the census and ACS and a difference-in-difference model following the approach of Hickman (2009).

Building the Stock of College-Educated Labor Revisited

Building the Stock of College-Educated Labor Revisited

Building the Stock of College-Educated Labor Revisited

In a recent paper in the Journal of Human Resources , Dynarski (2008) used data from the 1 percent 2000 Census Public Use Microdata Sample (PUMS) files to demonstrate that merit scholarship programs in Georgia and Arkansas increased the stock of college-educated individuals in those states. This paper replicates the results in Dynarski (2008) but we also find important differences in the results between the 1 percent and 5 percent PUMS, especially for women. We also demonstrate that the author's use of clustered standard errors, given the small number of clusters and only two policy changes, severely understates confidence intervals.

Are Public Employees Overpaid?

The research reported in this article shows that public employees, both state and local government employees, are not overpaid and may be slightly undercompensated. Comparisons with the private-sector employees that control for education, experience, hours of work, organizational size, gender, race, ethnicity, and disability indicate that the public-employment compensation (wages and benefits) penalty is relatively small. On average there is a 3.7 percent penalty in total compensation for full-time state and local employees when compared to similar private-sector employees. The data analysis also reveals substantially different approaches to staffing and compensation between the private and public sectors. On average, state and local public-sector workers are more highly educated than the private-sector workforce; 54 percent of full-time state and local public-sector workers hold at least a four-year college degree compared to 35 percent of full-time private sector workers. For college-educated labor, state and local governments pay salaries on average over 25 percent less than private employers. The public sector appears to set a floor on compensation, particularly improving the compensation of workers with high-school educations, when compared to similarly educated workers in the private sector. Benefits are allocated differently between private- and public-sector full-time workers. State and local government employees receive a higher portion of their compensation in the form of employer-provided benefits. Public employers provide better health insurance and pension benefits. National polling data indicate that the public does not believe public employees are overpaid. They oppose pay and benefit cuts, but believe pay freezes and greater employee contributions to their health and pensions plans may be appropriate. Nevertheless, thirteen states revised their public-sector collective-bargaining laws, mainly weakening employee bargaining power or severely restricting or eliminating collective bargaining, while the majority of the public opposed those changes.

Building the Stock of College-Educated Labor Revisited

In a recent paper in this Journal, Dynarski (2008) used data from the 1-percent 2000 Census Public Use Microdata Sample (PUMS) files to demonstrate that merit scholarship programs in Georgia and Arkansas increased the stock of college-educated individuals in those states. This paper replicates the results in Dynarski (2008) but we also find important differences in the results between the 1-percent and 5-percent PUMS, especially for women. We also demonstrate that the author’s use of clustered standard errors, given the small number of clusters and only two policy changes, severely understates confidence intervals.

Building Knowledge Stocks Locally

There is increasing evidence that the stock of college-educated labor in an area has fundamental effects on state and local economies through its association with wages, economic growth, personal incomes, and tax revenues. As a result, policy makers in many states attempt to increase the percentage of the state’s population (or workforce) that has a college degree through the use of various higher education policies that have the potential to influence the supply side of the labor market. This article reviews evidence on the effectiveness of these policies in achieving that goal. The author discusses several types of policies related to the finance and production of undergraduate education within a state, including expansions in degree production, merit-based scholarships, location-contingent financial aid, adjustments to the composition of enrollment by residency or by field of study, and internships with state-based employers.

Are there sex differences in the utilization of educational capital among college-educated workers?

This paper introduces the concept of educational utilization as an overlooked part of the education-to-work transition and a potential mechanism by which occupational sex segregation is generated among the college-educated labor force. The paper begins with a critical discussion of the operationalization approaches that have been used in prior research that implicitly measures educational utilization. Multiple empirical measure of the concept are then developed using data from the O*NET and the National Surveys of College Graduates. The explanatory power of each measure is assessed using conditional logit models of occupational attainment. A combined measure is then used to assess sex differences in educational utilization using data from the 1993 and 2003 National Surveys of College Graduates for 2 cohorts of college graduates—those who earned their baccalaureate or post-baccalaureate degrees and entered the labor market in the years 1985–1993 and 1995–2003. The analysis identifies sex differences in educational utilization that vary across field, degree level and cohort and concludes with an examination of the implications of sex differences in educational utilization for occupational segregation.

Building the Stock of College-Educated Labor

Half of college students drop out before completing a degree. These low rates of college completion among young people should be viewed in the context of slow future growth in the educated labor force, as the well-educated baby boomers retire and new workers are drawn from populations with historically low education levels. This paper establishes a causal link between college costs and the share of workers with a college education. I exploit the introduction of two large tuition subsidy programs, finding that they increase the share of the population that completes a college degree by three percentage points. The effects are strongest among women, with white women increasing degree receipt by 3.2 percentage points and the share of nonwhite women attempting or completing any years of college increasing by six and seven percentage points, respectively. A cost-benefit analysis indicates that tuition reduction can be a socially efficient method for increasing college completion. However, even with the offer of free tuition, a large share of students continue to drop out, suggesting that the direct costs of school are not the only impediment to college completion.

Building the Stock of College-Educated Labor

Abstract Half of college students drop out without completing a degree. This paper establishes a causal link between college costs and degree completion. I use quasi-experimental methodology to analyze two state scholarship programs. The programs increase the share of the exposed population with a college degree by three percentage points, with stronger effects among women. A cost-benefit analysis indicates that the programs are socially efficient at rates of return to schooling as low as 5 percent. Even with the offer of free tuition, many students continue to drop out, suggesting tuition costs are not the only impediment to college completion.