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Educational Spillovers: Does One Size Fit All?

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In a search model of production, where agents accumulate heterogeneous amounts of human capital, an individual worker's wage depends on average human capital in the searching population. Following this model, the authors use a large American panel data set to estimate a Mincerian wage equation augmented with terms for average human capital. They find that there is a positive and significant spillover effect, but that the effect differs by gender and population group (whites, blacks, and Hispanics), as well as educational status. The differing spillover effects can only partially be explained by occupational choice.

Topic(s): Labour markets
JEL Code(s): I, I2, I29, J, J2, J24, J3, J31