Assessing the Impact of Human Capital on Jobs and Political Attitudes

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This proposed research will study how labor market opportunities and political attitudes have changed in response to population-level schooling gains over the last several decades, drawing on evidence from a large number of developing countries. While several countries rapidly train a large pool of skilled workers, they struggle to create good jobs to absorb this educated labor force. Large fractions of low-skilled workers are underemployed, while many of the highly skilled are unemployed and waiting for jobs. This labor market dysfunction is puzzling to economists who have study how workers shift from low productivity agriculture to higher productivity non-farm sectors during the process of economic development. The research results will be helpful for both micro- and macro-oriented research in development economics and inform policy making to create jobs and reduce poverty. This project will contribute graduate education, generate new data sets on education, as well as provide inputs into education policy. The results of this research will guide educational policy as well as the spread of democracy across the globe. This research project will leverage publicly available individual-level census data and other data sets and policy-driven variation in access to education generated by free primary education (FPE) laws to investigate two issues: (i) does increased education change job expectations and if so, what impact does it have on labor market outcomes?; (ii) does education-induced increase in unemployment lead to decrease faith in democracy? The PI develops a simple theoretical model education, labor market outcomes beliefs in democracy, and apply difference-in-differences (diff-and-diff) and regression discontinuity-in-differences (RD-in-diff) techniques to generate causal evidence of the impact of additional education on employment outcomes, and on political attitudes. The PI relies on random variation in changes in education policies across countries and through time for identification. Instead of cross-country analyses, the PI will provide new understanding about labor markets in developing countries by implementing a consistent set of research methodologies in each country, to identify the impacts of human capital on labor markets. The results of this research will guide educational policy making in several parts of the world.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.