The Supply of Skill and Endogenous Technical Change: Evidence from a College Expansion Reform
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Peer-reviewed
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Abstract
We examine the labor market consequences of an exogenous increase in the supply of skilled labor in several municipalities in Norway, resulting from the construction of new colleges in the 1970s. We find that skilled wages increased as a response, suggesting that along with an increase in the supply there was also an increase in demand for skill. We also show that college openings led to an increase in the productivity of skilled labor and investments in R&D. Our findings are consistent with models of endogenous technical change where an abundance of skilled workers may encourage firms to adopt skill-complementary technologies.
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Keywords
J23, J24, endogenous technical change, college reform
Journal Title
Journal of the European Economic Association
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Journal ISSN
1542-4766
1542-4774
1542-4774
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Oxford University Press (OUP)