Local Labor Markets and Human Capital Investments

Research output: Working paper

Abstract

I study whether human capital investments are based on local rather than national demand, and whether this is explained by migration or information frictions. I analyze three sector-specific shocks with differential local effects, including the dot-com crash, the 2008 financial crisis, and a shock transforming Delaware into an international financial center. I find universities in areas more exposed to sectoral shocks experience greater changes in sector-relevant majors. Using rich student-level data, I find this is not explained by information frictions, but more likely by migration frictions. The results suggest encouraging human capital investments based on national demand may increase mismatch.
Original languageEnglish (US)
Number of pages82
StatePublished - Mar 11 2017

Publication series

NameIZA Discussion Paper
No.10598

Fingerprint

Local labour markets
Friction
Human capital investment
Sectoral shocks
Financial crisis
Crash
Mismatch
Financial centres

Keywords

  • college major choice
  • local labor markets
  • migration frictions
  • information frictions

Cite this

Weinstein, R. (2017). Local Labor Markets and Human Capital Investments. (IZA Discussion Paper; No. 10598).

Local Labor Markets and Human Capital Investments. / Weinstein, Russell.

2017. (IZA Discussion Paper; No. 10598).

Research output: Working paper

Weinstein, R 2017 'Local Labor Markets and Human Capital Investments' IZA Discussion Paper, no. 10598.
Weinstein R. Local Labor Markets and Human Capital Investments. 2017 Mar 11. (IZA Discussion Paper; 10598).
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