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Title: Human Capital Externalities and the Geographic Variation in Returns to Experience

Citation Type: Miscellaneous

Publication Year: 2015

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Abstract: This paper provides evidence that the average human capital of a labor market has a positive effect on individual human capital accumulation and wage growth over the life cycle. The return to experience in a labor market is found to be increasing in the share of workers with a bachelor's degree or more (college share) in the market. An instrumental variable and panel data with individual fixed effects are used to address the potential endogeneity of college share and the sorting of workers across labor markets respectively. The effect of the college share of a labor market is shown to persist after workers leave the market, suggesting that a larger college share raises the return to experience through the accumulation of human capital valuable in all markets. The findings provide an explanation for the higher returns to experience in large cities and rich countries documented recently in the literature.

Url: https://www.sole-jole.org/16406.pdf

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Authors: Guo, Junjie

Publisher: UW-Madison

Data Collections: IPUMS USA

Topics: Other

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