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

29 Pages Posted: 12 Aug 2014

See all articles by Antonio Ciccone

Antonio Ciccone

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Giovanni Peri

University of California, Davis - Department of Economics

Date Written: October 2013

Abstract

We find that over the period 1950-1990, states in 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 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.

Keywords: human capital, skills, schooling, labor demand, United States

JEL Classification: E24, I20, J23, J24

Suggested Citation

Ciccone, Antonio and Peri, Giovanni, Schooling Supply and the Structure of Production: Evidence from US States 1950-1990 (October 2013). Asian Development Bank Economics Working Paper Series No. 377. Available at SSRN: https://ssrn.com/abstract=2337544 or http://dx.doi.org/10.2139/ssrn.2337544

Antonio Ciccone (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
+34 93 542 1669 (Phone)
+34 93 542 1746 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Giovanni Peri

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

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