Panel: Linkages between Higher Education and the Labor Market

Friday, November 3, 2017: 3:15 PM-4:45 PM
Columbian (Hyatt Regency Chicago)

*Names in bold indicate Presenter

Panel Organizers:  Rajashri Chakrabarti, Federal Reserve Bank of New York
Panel Chairs:  Michael Lovenheim, Cornell University
Discussants:  Celeste Carruthers, University of Tennessee and Kirabo Jackson, Northwestern University

Postsecondary Supply and Unemployment Dynamics
Rajashri Chakrabarti, Federal Reserve Bank of New York and Michael Lovenheim, Cornell University

The Labor Market Returns to Spending on College Instruction
Seth Zimmerman1, Joseph Altonji2 and James Thomas2, (1)University of Chicago, (2)Yale University

This panel studies the interactions between higher education and the labor market. It explores whether the distribution of higher education institutions and students affect labor market dynamics and outcomes. And, conversely, do labor market shocks affect postsecondary supply? The papers in this panel seek to answer these questions. Each paper leverages novel sources of data, innovative methods, and afford a policy relevant focus in that they inform how higher education policy may affect labor market dynamics and outcomes.

The first paper studies whether and how higher education institutions respond to labor market shocks such as the Great Recession. The authors find that community colleges are quite elastic and respond to the increased demand for higher education (brought about by a recession) by expanding, largely by adding additional sections taught by adjunct faculty.

The second paper examines the effect of postsecondary supply conditions –number and composition of higher education institutions—on labor market dynamics. Using a novel instrumental variables strategy, the paper argues that postsecondary institutions in some areas are better positioned to retrain workers than others, thus creating a link between higher education supply conditions and unemployment dynamics. Thus the composition of post-secondary supply in an area can thus play a key role in affecting recovery from recessions and in general labor market cycles.

The third paper uses rich administrative data and a quasi-experimental design to study how public higher education expenditures affect labor market outcomes for students, and how this varies by institution type and major. The paper uses exogenous variation in resources at the institution by major level generated by the interaction between changes in state policy that affect (and generally reduce) funding at the institution level and differences in departments’ capacity to adjust faculty inputs. This approach lets the authors trace out how changes in resources within institution and field affect persistence, graduation, and labor market outcomes.

The fourth paper studies how student composition in colleges such as same-race/same-nativity networks affects the annual earnings and employment of college students using data from multiple cohorts of students entering New York City's public university system merged with state unemployment insurance records. The authors find substantial earnings and employment benefits for white native-born, black native-born, and black immigrants who enroll in cohorts with larger shares of same group peers.

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