Events

Prof. Chang Liu
Assistant Professor of Economics
National University of Singapore

Structural transformation from manufacturing to services varies substantially across regions. Using U.S. regional data, we document that commuting zones with universities (i) experience faster growth in service employment, particularly in high-skill services, (ii) exhibit higher college wage premia, and (iii) account for a disproportionate share of newly emerging tasks. We develop a task-based theory of local structural transformation to examine two roles of universities: the supply of high-skilled labor and the creation of new tasks that generate skill-biased labor demand. Our theory and quantitative analysis suggest that the innovation channel plays a central role in jointly accounting for the rise of services and the higher skill premium in regions with universities. Overall, our framework provides microfoundations for skill-biased structural change and highlights the importance of higher education in shaping regional economic dynamics