This paper considers the labor market consequences of attending a Historically Black College/University (HBCU). With 2015 U.S. Department of Education College Scorecard Data, we use a matching estimator to identify and estimate the treatment effect of HBCU attendance on median earnings, earnings relative to a high school graduate, and income relative to that of the household at time of initial enrollment, 6 and 10 years after attendance. Our treatment effect parameter estimates suggest that once we account for the differential return to college majors, the urban wage premium, and the proportionality/dependence of the labor market return of black student college attendees on the share of a college/university's student population that is black,
there is a long-run earnings premium associated with HBCU attendance. In addition, for HBCUs in general, we find that there is a population of students who would realize a positive labor market premium---as high as approximately 42 percent---and earn more than a high school graduate if they were to attend an HBCU. With respect to intergenerational income mobility, we find that HBCU attendance enables their actual and potential attendees to move to a higher quantile of income relative to their households in the long-run.
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Labor Market Power
We develop, estimate, and test a tractable general equilibrium model of oligopsony with differentiated jobs and concentrated labor markets. We estimate key model parameters by matching new evidence on the relationship between firms’ local labor market share and their employment and wage responses to state corporate tax changes. The model quantitatively replicates quasi-experimental evidence on imperfect productivity-wage pass-through and strategic wage setting of dominant employers. Relative to the efficient allocation, welfare losses from labor market power are 7.6 percent, while output is 20.9 percent lower. Lastly, declining local concentration added 4 percentage points to labor’s share of income between 1977 and 2013. (JEL E25, H71, J24, J31, J42, R23)
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- Award ID(s):
- 1824422
- PAR ID:
- 10450315
- Date Published:
- Journal Name:
- American Economic Review
- Volume:
- 112
- Issue:
- 4
- ISSN:
- 0002-8282
- Page Range / eLocation ID:
- 1147 to 1193
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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This article considers the labor market consequences of attending a Historically Black College/University (HBCU). With 2015 U.S. Department of Education College Scorecard Data, we use a matching estimator to identify and estimate the treatment effect of HBCU attendance on median earnings, earnings relative to a high school graduate, and income relative to that of the household at the time of initial enrollment, 6 and 10 years after attendance. Our treatment effect parameter estimates suggest that once we account for the differential return to college majors, the urban wage premium, and the proportionality/dependence of the labor market return of Black student college attendees on the share of a college/university’s student population that is Black, there is a long-run earnings premium associated with HBCU attendance. In addition, for HBCUs in general, we find that there is a population of students who would realize a positive labor market premium—as high as approximately 42%—and earn more than a high school graduate if they were to attend an HBCU. With respect to intergenerational income mobility, we find that HBCU attendance enables their actual and potential attendees to move to a higher quantile of income relative to their households in the long runmore » « less