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

Date: October 2013
Type: Papers and Briefs
Subject:
Series: Economics Working Papers
ISSN: 1655-5252 (print)
Author: Ciccone, Antonio; Peri, Giovanni

Description

This paper finds that over the period 1950–1990, states in the United 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 toward more schooling-intensive industries played a less important role. To try and understand this finding theoretically, the authors 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. They 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.

Contents

  • Abstract
  • Introduction
  • Theoretical Framework
  • Data and Empirical Framework
  • Results
  • Conclusion
  • Appendix
  • References