Date of Award

May 2014

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

Advisor(s)

Stuart S. Rosenthal

Keywords

Agglomeration, Investment in Education, Regional Development, Spillovers

Subject Categories

Social and Behavioral Sciences

Abstract

This dissertation consists of two essays that study the linkages among agglomeration economies, investment in education, and regional development. In the first essay, I study the impact of a federal educational investment on various aspects of local economies. In the second essay, I examine the spillover effects among workers with different skills, which are identified by their college majors.

The first essay presents evidence of direct spillovers from universities and examines the short- and long-run effects of university activities on geographic clustering of economic activity, labor market composition and local productivity. I treat the designation of land-grant universities as a natural experiment after controlling for the confounding factors with a combination of synthetic control methods and event-study analyses. Three key results are obtained. First, the designation substantially increased local population density. Second, the share of manufacturing workers in the population, an indicator of labor market composition, was not affected by the designation. Third, the designation greatly enhanced local manufacturing productivity, as measured by local manufacturing output per worker, especially in the long run. This positive effect on the productivity in non-education sectors suggests the existence of spillovers from universities. Over an 80-year horizon, I estimate that most of the increase in manufacturing productivity was because of direct spillovers from universities instead of induced agglomeration economies that arise from the increase in population.

The second essay studies the manner and extent to which worker skill type affects agglomeration economies that contribute to productivity in cities. I use college major to proxy for skill type among workers with a Bachelor's degree. Workers with college training in information-oriented and technical fields (e.g. STEM areas such as Engineering, Physical Sciences, and Economics) are associated with economically important within-field agglomeration economies and also generate sizeable spillovers for workers in other fields. In contrast to related work by Florida (2002a, 2002b), within-field and across-field spillovers for workers with college training in the arts and humanities are much smaller and often non-existent. While previous research suggests proximity to college-educated workers enhances productivity, these findings suggest that not all college educated workers are alike. Instead, positive spillover effects appear to derive mostly from proximity to workers with training in information-oriented and technical fields.

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