Colleges and Local Labor Markets in South Korea
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- •Author : Taehoon Kim
- •Date : 2025-01
- •Keyword : College, Fertility, Local labor market, Earnings, Employment, Two-way fixed effects model
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Abstract
KEKA Working Paper No.27
This study investigates the effects of college closures on local labor market outcomes in South Korea. I employ the two-way fixed effects model, which compares changes in labor market outcomes according to changes in the existence of colleges across different counties. I find that a college closure decreases the monthly earnings of workers in the county by 2.3-2.7%. The effect is greater for female workers and in the metropolitan area. The college closure also reduces the probability of being self-employed by 0.58-1.25 percentage points. These results imply that the reduction in the number of local college students and college closures in the future due to the drastic decline in the size of young cohorts can have significant negative impacts on the local labor market.
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