An Empirical Analysis of the Effect of Construction Expenditures on Educational Attainment in the United States

Abstract

The United States Construction Industry has been a stalwart of the American Economy for centuries and continues to thrive in the 21st Century as one of the world’s largest construction industries. However, as we progress further into a modern era dominated by technological change, the more that demand for skilled labor becomes a driving force in today’s labor market. In response to the rise to prominence of skill biased technical change, this paper examines the effect of annual state-level construction expenditures on the dropout rate among high school youth in addition to the educational attainment and wage characteristics of those currently employed in the construction industry. This study controls for a base year of 2008 and an equivalent base population to estimate the effect of construction expenditures on the low-skilled labor market. This paper found no significant effect on high school dropout rates and some significant positive effects on the wage characteristics of former dropouts who are current employees in the construction industry.