Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/161221 
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers No. 10598
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
I study whether human capital investments are based on local rather than national demand, and whether this is explained by migration or information frictions. I analyze three sector-specific shocks with differential local effects, including the dot-com crash, the 2008 financial crisis, and a shock transforming Delaware into an international financial center. I find universities in areas more exposed to sectoral shocks experience greater changes in sector-relevant majors. Using rich student-level data, I find this is not explained by information frictions, but more likely by migration frictions. The results suggest encouraging human capital investments based on national demand may increase mismatch.
Subjects: 
college major choice
local labor markets
migration frictions
information frictions
JEL: 
J24
I20
R12
Document Type: 
Working Paper

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