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Human Capital Spillovers and Local Unemployment

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  • Jung Hyun Choi
  • Richard K. Green

Abstract

This paper examines the magnitude of human capital spillovers on unemployment. Using bothindividual and metropolitan level data, we find that the adult population share of collegegraduates is negatively associated with the unemployment rate. More specifically, we find thatthose who reside in MSAs with higher shares of college graduates are more likely to beemployed, even after controlling for individual, MSA and state level factors including individual’sown education level. The likelihood of being unemployed falls further for the non-collegegraduates compared to the college graduates. We also find that MSAs with higher shares ofcollege graduates have lower average unemployment rates. This education spillover is nottransitory but is an important factor that explains long-term divergences in the MSAunemployment rates.

Suggested Citation

  • Jung Hyun Choi & Richard K. Green, 2014. "Human Capital Spillovers and Local Unemployment," Working Paper 9319, USC Lusk Center for Real Estate.
    • Handle: RePEc:luk:wpaper:9319
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    1. Cox, Michael & Peichl, Andreas & Pestel, Nico & Siegloch, Sebastian, 2014. "Labor demand effects of rising electricity prices: Evidence for Germany," Energy Policy, Elsevier, vol. 75(C), pages 266-277.

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