2024 Fall Seminar Series Seminar: Kevin Stange University of Michigan

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

Co-authors: John Conzelmann (University of North Carolina at Chapel Hill), Steve Hemelt (University of North Carolina at Chapel Hill), Brad Hershbein (W.E. Upjohn Institute for Employment Research), Shawn Martin (Cornerstone Research), & Andrew Simon (University of Chicago)

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.