Higher Education Subsidies and Human Capital Mobility

John Kennan

No 308, 2012 Meeting Papers from Society for Economic Dynamics

Abstract: In the U.S. there are large differences across States in the extent to which college education is subsidized, and there are also large differences across States in the proportion of college graduates in the labor force. State subsidies are apparently motivated in part by the perceived benefits of having a more educated workforce. The paper uses the migration model of Kennan and Walker (2011) to analyze how geographical variation in college education subsidies affects the migration decisions of college graduates. The model is estimated using NLSY data, and used to quantify the sensitivity of migration decisions to differences in expected net lifetime income. The preliminary estimates suggest that State subsidies have little effect on the geographical distribution of college graduates.

Date: 2012
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Working Paper: Higher Education Subsidies and Human Capital Mobility (2009)
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