Human Capital Spillovers and Local Unemployment

54 Pages Posted: 19 Jun 2014 Last revised: 4 Jan 2016

See all articles by Jung Hyun Choi

Jung Hyun Choi

The Urban Institute

Richard K. Green

University of Southern California - Lusk Center for Real Estate

Date Written: June 11, 2014

Abstract

This paper examines the magnitude of human capital spillovers on unemployment. Using both individual and metropolitan level data, we find that the adult population share of college graduates is negatively associated with the unemployment rate. More specifically, we find that those who reside in MSAs with higher shares of college graduates are more likely to be employed, even after controlling for individual, MSA and state level factors including individual’s own education level. The likelihood of being unemployed falls further for the non-college graduates compared to the college graduates. We also find that MSAs with higher shares of college graduates have lower average unemployment rates. This education spillover is not transitory but is an important factor that explains long-term divergences in the MSA unemployment rates.

Keywords: Unemployment, Spillovers, Regional Economics

JEL Classification: J21, J64, R23

Suggested Citation

Choi, Jung Hyun and Green, Richard K., Human Capital Spillovers and Local Unemployment (June 11, 2014). Available at SSRN: https://ssrn.com/abstract=2449075 or http://dx.doi.org/10.2139/ssrn.2449075

Jung Hyun Choi

The Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States

Richard K. Green (Contact Author)

University of Southern California - Lusk Center for Real Estate ( email )

2250 Alcazar Street
Los Angeles, CA 90089
United States

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