Skills, Majors, and Jobs: Does Higher Education Respond?

Authors

Johnathan G. Conzelmann, The University of North Carolina at Chapel HillFollow
Steven W. Hemelt, The University of North Carolina at Chapel HillFollow
Brad J. Hershbein, W.E. Upjohn Institute for Employment ResearchFollow
Shawn Martin, Cornerstone ResearchFollow
Andrew Simon, The University of Chicago and Australian National University Research School of EconomicsFollow
Kevin M. Stange, University of MichiganFollow

Upjohn Author ORCID Identifier

https://orcid.org/0000-0002-2534-8164

Series

Upjohn Institute working paper ; 24-400

DOI

10.17848/wp24-400

Issue Date

April 2024

Abstract

How does postsecondary human capital investment respond to changes in labor market skill demand? We quantify the magnitude and nature of this response in the U.S. 4-year sector. To do so, we develop a new measure of institution-major-specific labor demand, and corresponding shift-share instrument, that combines job ads with alumni locations. We find that postsecondary human capital investments meaningfully respond. We estimate elasticities for degrees and credits centered around 1.3, generally increasing with time horizon. We provide evidence that both student demand and institutional supply-side constraints matter. Our findings illuminate the nature of educational production in higher education.

Sponsorship

National Science Foundation (Collaborative Grant #1919387), Russell Sage Foundation (Grant #1811-09737), and Institute of Education Sciences (Grant R305B150012)

Subject Areas

EDUCATION; Postsecondary education; LABOR MARKET ISSUES; Job search