Date of Award
Doctor of Philosophy (PhD)
The strength of the overall economy depends critically on the human capital -- the knowledge and skills -- of the workers in that economy. Investment in education is a central way for individuals to acquire human capital. The acquisition of human capital through education can also provide an important signal of individual ability, and can otherwise be rewarded with better labor market outcomes and opportunities. This dissertation explores important determinants of human capital investment by examining key incentives that influence the decision to invest in a college education.
In the first study, I examine the college educational, earnings, and employment responses to local labor demand shocks brought about by recent innovations in horizontal drilling and hydraulic fracturing. I find that a boom in fracking production within a county causes a reduction in college enrollment rates at four-year institutions, an increase in earnings, and an increase in employment for both men and women, with stronger effects for men. The decline in college enrollment during a boom is largely reversed as fracking production slows within a county. Educational attainment, however, remains persistently low for cohorts who experience the biggest enrollment declines. Workers who never attend college experience relatively larger earnings and employment gains, when compared to college-educated workers. These findings reveal that fracking-induced shifts in labor demand raise the opportunity cost of, and reduce the relative returns to, college.
In the second study, I analyze how new fracking production at varying distances from a particular county affects earnings, employment, and college enrollment within that county. I find that new fracking production up to 60 miles away generates positive earnings and employment gains within a county, most notably for non-college-educated men. New fracking production within 40 miles of a county is also associated with reductions in enrollments at two-year and four-year institutions. Beyond a distance of 60 miles, I find little evidence that new fracking production affects earnings, employment, or college enrollment. These findings have important implications for many counties throughout the United States, even if they do not engage in fracking, but are especially relevant for the top-producing and surrounding counties who account for the vast majority of the expansive increase in fracked oil and gas production over the last two decades.
In the final study, I examine the effect of unilateral divorce laws on college attainment. Exploiting state variation in the adoption of unilateral divorce laws, I show that both women and men are less likely to report having a bachelor's degree in states that adopted unilateral divorce laws. This reduction in human capital investment occurs in states with community property laws, where the law requires an even split of the couple's assets in the event of a divorce and is most pronounced for white women and white men. I find no distortionary effects of unilateral divorce laws on the human capital decisions of black men or black women, even in states with community property laws.
Neilson, Elijah, "Essays on the Determinants of Human Capital Investment" (2020). All Dissertations. 2627.