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Public Lecture: Higher Education, Preference, Housing Cost and the Location Choice of Employment of College Graduates

Lecturer: Associate Professor HUANG Mian, Research Institute of Economics and Management

Host: Lecturer YU Sha, School of Public Finance and Taxation

Time: 12:00-13:30 Tuesday, Nov.27, 2018

Venue: 811 Room, Gezhi Building, Liulin Campus, Southwestern University of Finance and Economics

Organizer: School of Public Finance and Taxation and Office of Research Affairs

Introduction to the speaker:

HUANG Mian is a doctor of Economics and serves as an associate professor in Research Institute of Economics and Management. He graduated from the department of Economics, Carlos III University. His main research areas are Micro Econometrics and Labor Economics.

Content summary:

A large number of new college graduates enter the Chinese labor market every year, whose location choice of employment not only influences their own welfare but also has impact on regional economic development, which leads to competition for talents among local governments using various policies. Empirical evidence based on our new college graduates survey suggests that college graduates are significantly more likely to stay in the places where they obtain the tertiary degrees, and also are more likely to return to where they come from. We use a simple discrete choice model to explain how graduates' make their choices of this pattern and some other variables, i.e. housing cost among other location traits, are also considered in our model to help us better understand and predict their behavior. Higher education locality makes graduate prefer local market is because either they have advantages due to information or matching the local demand better than outsiders or they like the place more than graduates who chose education in other places. We also study the effect of housing price on graduates' choice of location. These two variables are prone to have endogeneity problems. The former arises when one chooses education location based on prospective employment and on individual preference for specific region, while the later arises when there is unobservable characteristics of locations. We allow for heterogeneous unobservable individual preference to model the first endogeneity and location fixed effects are included and estimated by BLP method to solve the endogeneity of housing price. Simulation result on effects of education location and housing price shows there are big heterogeneity among population and locations. We believe these results shed some new light on how to allure people with ability more efficiently.