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- THREE ESSAYS ON THE CHOICE OF COLLEGE MAJOR AND TRADE EXPOSURE
- Wu, Yu-Siang
- Electronic Theses & Dissertations
This dissertation is composed of three chapters on the effects of import exposure. For my dissertation I mainly use the variation of import competition across local labor markets to explore its impact on labor market outcomes (e.g., wages and employment status), human capital investment decisions (choice of college major), and education-job mismatch.Chapter one explores the relationship between increasingly intense Chinese import competition and American college students’ choice of major in...
Show moreThis dissertation is composed of three chapters on the effects of import exposure. For my dissertation I mainly use the variation of import competition across local labor markets to explore its impact on labor market outcomes (e.g., wages and employment status), human capital investment decisions (choice of college major), and education-job mismatch.Chapter one explores the relationship between increasingly intense Chinese import competition and American college students’ choice of major in the 2000s. By employing a modified version of the measure for Chinese import competition from Autor, Dorn, and G. Hanson (2013) and analyzing the relationship between industries and college majors, I find that rising Chinese trade exposure of nineteen industries in the 2000s has a negative effect on American students’ choice ofsix engineering majors. The magnitudes of the effects range from 0.62 to 0.69 percentage point decreases in the probability of choosing those six engineering majors. I also find that males are more negatively affected by Chinese import competition in terms of the choice of the six engineering majors, whereas no significant results exist if I restrict my sample to females.Chapter two analyzes how increased trade exposure affects students’ choice of STEM major. I first present a simple model to illustrate how trade exposure impacts students’ utility functions through their self-beliefs about labor market outcomes and then use assorted data to show that import competition positively affects the choice of STEM major. I find that increased import exposure in the 2000s leads to 1.05 and 0.72 percentage point increases in the probability of choosing STEM majors for college underclassmen and upperclassmen, respectively. As for labor market outcomes, my results suggest that a rise in import competition leads to a pronounced negative effect on weekly wages, employment status, and full-time employment across STEM and non-STEM occupations from the late 1990s through the 2000s. STEM occupations, however, are less negatively impacted by import competition, which helps explain why a rise in import exposure increases the probability of students choosing STEM majors.Chapter three investigates the impact of import exposure on education-occupation mismatch. I first use the concept of a matching function to explain the connection between mismatch and the supply of and demand for college graduates. Next, I use an input-output table to construct a measure of import exposure that accounts for both direct and indirect trade shocks. Findings show that increased import exposure leads to a rise in education-occupation mismatch from 2011 through 2019. Moreover, for the supply side I present that a rise in import exposure significantly increases the number of bachelor’s degrees awarded in 4-year colleges and in most degree fields. However, for the demand side, I do not observe corresponding increases in occupational employment for most fields of education. The unbalanced demand for and supply of college graduates might potentially explain the rise in education-occupation mismatch.