Essays in labour economics

This thesis examines factors that influence economic and labour market outcomes throughout the life-cycle, with a focus on the importance of place. The first chapter examines the role of local labour market conditions on educational take-up and human capital investment in England. I match administrative data on firms and students to document the variation in the level and field of skills demanded and study whether local skill demand shapes local students’ educational attainment. I document a positive cross-sectional correlation between the skills demanded in local jobs and education choices. But, using a dynamic difference-in-difference strategy, I find at most a very muted response to large increases in local demand for degrees or specific skills for subsequent cohorts of students making educational investment decisions. The second chapter turns to the question of geographic mobility, using PSID data to shed light on the generational dynamics of (internal) migration. I find that children born in a different state than at least one of their parents have approximately 20-25 percent higher short-term and medium-term interstate migration rates, and 50 percent higher lifetime mobility rates. These differences are robust to controlling for a wide set of observables, and are consistent across subgroups by education and gender. These findings have significant implications for spatial sorting models and our understanding of intergenerational transmission of economic opportunity. In the third chapter, we assess the career earnings losses that individual Swedish workers suffered when their occupations’ employment declined. Our estimates show that occupational decline reduced mean cumulative earnings from 1986–2013 by no more than 2%–5%, with larger losses for those initially at the bottom of their occupations’ earnings distributions. This loss reflects a combination of reduced earnings conditional on employment, reduced years of employment and increased time spent in unemployment and retraining.