Positive Externalities From College Education

Via Ryan Avent, some research from John Winters in support of the common sense view that having a better-educated population is beneficial. It’s “Human Capital Externalities and Employment Differences across Metropolitan Areas of the U.S.”:

It has been well documented that employment outcomes often differ considerably across areas. This paper examines the extent to which the local human capital level, measured as the share of adults with a college degree, has positive external effects on labor force participation and employment for U.S. metropolitan area residents. We find that the local human capital level has positive externalities on participation for women, but an inconsistent effect on participation for men. However, the local human capital level reduces unemployment for both men and women. We also find that less educated workers generally receive the largest external benefits.

Avent says it’s “[i]nteresting that less educated workers benefit most.” That seems intuitive to me. College graduates get agglomeration, etc. benefits from having more high-skill people around but also face more competition. For low-skill workers, other people’s skills are purely beneficial.