On the Supply Side of AI: Higher-Education Investments and the Distribution of Labor-Market Returns

This paper provides the first causal evidence on how technology-specific investments in tertiary education shape early-career labor-market outcomes during the AI transition. Leveraging the staggered establishment of specialized AI centers at India’s leading engineering institutions between 2017 and 2024, we find that AI-center adoption increases full-time undergraduate placement rates by 4 percentage points and raises median early-career earnings by 8-11 percent. The gains are heterogeneous across institutions. Placement effects are largest among institutions serving academically stronger cohorts, while conditional wage gains are concentrated among disadvantaged cohorts with weaker outside options and those with greater geographic mobility. We find no evidence that these effects are driven by selective student sorting or coincident local labor-market booms. Overall, the results suggest that tertiary-education capacity is an important margin through which emerging economies adjust to frontier technological change.

The seminar series is organized by the Section Economics of Wageningen University (consisting of the groups Agricultural Economics and Rural Policy, Development Economics, Urban Economics, Environmental Economics and Natural Resources, and Economic and Environmental History).

The seminar is aiming to foster the exchange on recent topics in the field of economics. We consider contributions from all fields of economic research and invite speakers from Wageningen, the Netherlands and abroad.

The seminar is organized as a weekly lunch seminar taking place on campus. Meetings are between 12:00 and 13:00 hours. Lunch is served. 

All staff and students are welcome!