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Moretti, Enrico |
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Social Return to Education Ph.D. Dissertation, University of California - Berkeley, 2000. DAI, 62, no. 01A (2000): p. 274 Cohort(s): NLSY79 Publisher: UMI - University Microfilms, Bell and Howell Information and Learning Keyword(s): Census of Population; College Graduates; Educational Returns; Endogeneity; High School Dropouts; Technology/Technological Changes; Wage Equations The main goal of this dissertation is to estimate the social return to education. Understanding the magnitude of this return is key to assessing the efficiency of public investment in education. In the first part, I estimate externalities from education by comparing wages for otherwise similar individuals who work in cities with different shares of college graduates in the labor force. A key issue in this comparison is the presence of unobservable factors that may raise wages and be correlated with the share of educated workers. To control for the potential endogeneity of education across cities, I use a combination of longitudinal data from the National Longitudinal Survey of Youth (NLSY) and repeated cross-sectional data from the Census. The results from the NLSY sample are remarkably consistent with those based on Census data. A percentage point increase in the supply of college graduates raises high-school drop-outs' wages by 1.9%, high-school graduates' wages by 1.6%, the wages of college graduates by 0.4%. The effect is larger for less educated groups, as predicted by a conventional demand and supply model. But even for college graduates, an increase in the supply of college graduates increases wages, as predicted by a model that includes both conventional demand and supply factors and externalities. In the second part of the dissertation, I create and employ a unique worker-firm matched dataset to investigate the effect of human capital externalities on productivity and technological change in manufacturing firms. The dataset is obtained by combining the Census of Manufacturers and the Census of Population. I start by documenting a positive correlation between the productivity of manufacturing establishments in a given city and the average level of education outside the establishment in the same city. I find little evidence that omitted variables play a major role. I investigate whether in cities with a better-educated labor force plants tend to be equi pped with better technology. I find that in plants that are situated in cities with higher average education, both investment in computers and the fraction of new machinery to the total stock of machinery are larger, after controlling for a plant's characteristics. Furthermore, within a given city, investment in computers in a particular plant is positively associated with the number of workers who use computers outside the plant. |
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Bibliography Citation
Moretti, Enrico. Social Return to Education. Ph.D. Dissertation, University of California - Berkeley, 2000. DAI, 62, no. 01A (2000): p. 274. |