Year of Publication

2017

Degree Name

Doctor of Philosophy (PhD)

Document Type

Doctoral Dissertation

College

Business and Economics

Department/School/Program

Economics

First Advisor

Dr. William Hoyt

Abstract

The first chapter provides an introduction to my investigation of the impact of state-level educational investments in public K-12 education on future labor markets, specifically earnings and employment. In Chapter 2, the current literature supporting this investigation is examined while I offer a hole in the literature that I intend to fill. Then, in Chapter 3 I present a two-period, balanced-budget theoretical model in which I relate educational investments, mobility, and future earnings. This theoretical model is then implemented in Chapter 4 using state-level data and again in Chapter 5 using individual-level data.

Chapter 4 examines the impact of state-level educational investments in public education on aggregate state labor markets, specifically earnings and employment. Using data on K-12 educational spending, 8th grade cognitive test scores, and educational demographics of a state’s labor force, I observe the impact these state-level investments have on employment and earnings growth. Taking interstate migration into account, I separate the benefits from educational investment into benefits due to in-state investment and benefits due to out-of-state investment. By doing so I am able to identify whether or not educational investment spillovers exist between states. Results indicate that the earnings benefits associated with public K-12 educational spending spill over into other states, 8th grade NAEP test scores do not spill over into other states, and neither has a significant impact on other states’ employment growth.

Chapter 5 examines the impact of educational investments in public education on earnings of individuals. I extend my analysis from Chapter 4 by employing micro-data (on individuals) from the American Community Survey (ACS) instead of using state-level data. Using micro-data allows me to more accurately measure the investments used in the education of an area and to incorporate where education was attained and where it was employed. Using individual-level data also allows me to narrow my focus to younger participants in the labor force, providing a stronger link between lagged educational spending and earnings. Results indicate that K-12 educational spending does spill over in the form of positive earnings benefits, which helps to support the results of Chapter 4.

Digital Object Identifier (DOI)

https://doi.org/10.13023/ETD.2017.329

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