Research

　              For the dissertation abstract, please click here

            The contribution of rising school quality to U.S. economic growth (Job market Paper) Full Version

Abstract: This paper explores how much U.S. labor quality has increased due to rising school spending. Given a drastic increase in the U.S. public school spending per pupil during the 20th century, accounting only for the increases in mean years of schooling of the workforce may miss out on a significant part of labor quality growth. In order to estimate the impact of rising school spending on labor quality growth, I examine how earnings of younger cohorts compare to those of older cohorts, beyond the estimated Mincer return to schooling. My findings are that rising school spending is about half as important as increases in mean years of schooling for U.S. labor quality growth, and that labor quality growth explains about one quarter of the growth in labor productivity between 1967 and 2000. The growth in human capital of the workforce due to rising school spending explains only a quarter of the increases in empirical returns to schooling, and a rising skill premium explains the rest. Controlling for the rise in skill premium is important--failing to do so would double the estimated importance of the increased expenditure to growth in human capital.

            Explaining Rising School Spending in the U.S. (Work in Progress)

Abstract: Although U.S. public school spending per pupil increased dramatically during the 20th century, I find that its impact on labor quality growth has been fairly modest. This finding raises a question: Why did school spending increase so drastically, despite not being very productive? One important factor is an anticipated rise in the skill premium. Even though school spending is not very productive at increasing human capital, an anticipated increase in skill premium gives individuals an incentive to increase spending on schooling, by raising the return on spending. Empirical evidence suggests that technological progress in the U.S. has favored skilled labor, thereby steadily increasing the demand for skilled labor since 1940’s. Accordingly, an anticipated rise in skill premium can potentially explain increased school spending in the U.S. over that period. Not only does the rise in skill premium increase average spending on education over time, but it also has cross-sectional implications. If individuals anticipate high levels of education to be valued more in the market, individuals who choose more years of schooling would expect a higher wage growth in the future, and therefore spend relatively more money, in addition to more time, in acquiring education. Expenditures on schooling would then fan out over time.