The Impact of Agriculture and Farm Produce Prices on Human Capital Formation: Education Decisions of Young Americans in Agricultural Areas Before and During the Food Crisis 2000-2010

This study estimates the short-run effects of the structure of the local economy on high school dropout rates in agricultural areas in the United States from 2000 to 2010. Repeated cross-sections of census data are matched to state-level agricultural price indices and data on the regional composition of employment. Some authors theorise that human capital and land are substitutes, and increasing returns to land-intensive activities may lower human capital investments. I do not find empirical evidence of this in the rural United States. In fact, I find some evidence that as agriculture becomes more lucrative young people in areas with very high levels of agricultural employment become more likely to stay in school, not less, relative to those in areas with little or no agriculture within each state.