Local Labor Markets and Human Capital Investments

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I study whether human capital investments are based on local rather than national demand, using two positive and two negative shocks with differential local effects: the dot-com crash, the fracking boom, the 2008 financial crisis, and the shock making Delaware a financial headquarters. I find impacts on the share of sector-relevant degrees awarded following these shocks, on average across the U.S. However, universities in areas more exposed to sectoral shocks experience greater changes in sector-relevant majors. Differential impacts on major choice at the most exposed universities account for 15%–45% of the overall national effect on sector-relevant degrees.
Original languageEnglish (US)
Article number1119-10566R2
JournalJournal of Human Resources
StateAccepted/In press - Aug 6 2020


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