October 2022

IZA DP No. 15687: Education Expansion and High-Skill Job Opportunities for Workers: Does a Rising Tide Lift All Boats?

published in: Labour Economics, 2023, 82, 102354

We examine how education expansions affect the job opportunities for workers with and without the new education. To identify causal effects, we exploit a quasi-random establishment of Universities of Applied Sciences (UASs), bachelor-granting three-year colleges that teach and conduct applied research. By applying machine-learning methods to job advertisement data, we analyze job content before and after the education expansion. We find that, in regions with the newly established UASs, not only job descriptions of the new UAS graduates but also job descriptions of workers without this degree (i.e., middle-skilled workers with vocational training) contain more high-skill job content. This upskilling in job content is driven by an increase in high-skill R&Drelated tasks and linked to employment and wage gains. The task spillovers likely occur because UAS graduates with applied research skills build a bridge between middle-skilled workers and traditional university graduates, facilitating the integration of the former into R&D-related tasks.