Applied Micro seminar : Every Tuesday
Time: 12:15 pm – 13:30 pm
Date: 27 th of September 2022
Room : 3001

Elio NIMIER-DAVID (CREST) – “Local Human Capital and Firm Creation: Evidence from the Massification of Higher Education in France”

Abstract: Do college expansion policies promote local economic development? This paper exploits a construction policy of hundreds of new colleges in France over the 1990s and rich administrative data on workers and firms to assess the effects of higher education establishments. First, I study the medium-run impact on education, firm creation, employment and wages at the city level. Exploiting geographic variations and the staggered implementation of the policy in an event-study design, I find a persistent rise in the level of education of the local workforce and in firm entry. The creation of firms in (i) tradable industries and (ii) industries intensive in high-skill labor indicates that the effect is driven by the supply of newly educated workers. Yet, incumbent firms experienced lower growth and a higher exit rate following the opening of new colleges. Employment stays constant in the medium-run but is subject to large composition effects: employment increases for young high-skilled workers but decreases for older workers. City-level results are complemented with findings at the individual level, shedding light on long-run positive effects. Combining differences in dates of birth with the timing of the policy, I find that cohorts directly exposed to the new colleges became more educated, more likely to be employed and hold more skilled positions.

Organizers:
Benoît SCHMUTZ (Pôle d’économie du CREST)
Roland RATHELOT (Pôle d’économie du CREST)
Sponsors:
CREST