Working Paper: NBER ID: w17683
Authors: Antonio Ciccone; Giovanni Peri
Abstract: We find that over the period 1950-1990, US 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: Schooling Supply; Production Structure; Compulsory Schooling Laws; Child Labor Laws
JEL Codes: F11; F16; J31; R1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Compulsory schooling and child labor laws (J88) | increases in schooling supply (I21) |
| Mexican immigration (K37) | increases in schooling supply (I21) |
| increases in schooling supply (I21) | absorption through within-industry changes (O14) |
| increases in schooling supply (I21) | within-industry increases in schooling intensity (J24) |
| increases in schooling supply (I21) | shifts in industry composition (L16) |