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Sputnik-Inspired Educational Reform and Changes in Private Returns in America Hyeonggu Cha Clemson University, [email protected]

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Sputnik-Inspired Educational Reform and Changes in Private Returns in America Hyeonggu Cha Clemson University, Hcha@G.Clemson.Edu Clemson University TigerPrints All Dissertations Dissertations 12-2015 Soviet Launch of Sputnik: Sputnik-Inspired Educational Reform and Changes in Private Returns in America Hyeonggu Cha Clemson University, [email protected] Follow this and additional works at: https://tigerprints.clemson.edu/all_dissertations Part of the Public Policy Commons Recommended Citation Cha, Hyeonggu, "Soviet Launch of Sputnik: Sputnik-Inspired Educational Reform and Changes in Private Returns in America" (2015). All Dissertations. 1550. https://tigerprints.clemson.edu/all_dissertations/1550 This Dissertation is brought to you for free and open access by the Dissertations at TigerPrints. It has been accepted for inclusion in All Dissertations by an authorized administrator of TigerPrints. For more information, please contact [email protected]. SOVIET LAUNCH OF SPUTNIK: SPUTNIK-INSPIRED EDUCATIONAL REFORM AND CHANGES IN PRIVATE RETURNS IN AMERICA A Dissertation Presented to the Graduate School of Clemson University In Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy Policy Studies by Hyeonggu Cha December 2015 Accepted by: Dr. Curtis Simon, Committee Chair Dr. Robert Tollison Dr. Holley Ulbrich Dr. Joseph Stewart ABSTRACT On October 4th 1957, the Soviet Union launched the world’s first man-made satellite, Sputnik 1, into an elliptical low Earth orbit. This surprise triggered an arms race between the United States and the Soviet Union, as well as science-oriented educational reform in the U.S. Sputnik sparked changes for the U.S. in military, politics, policies, and education. The launch of Sputnik woke Americans up from complacency came from technology, science, and educational superiority. Educational reform started with emphasizing science and defense education and it was expanded to all levels of education. Early reforms, the National Science Foundation (NSF), and the National Defense Education Act (NDEA) of 1958 were focused on science and defense education during Eisenhower’s administration. Domestic programs such as Civil Rights and Great Society diffused educational policy to produce more general human capitals for improve poverty and economic growth during the administrations of Kennedy and Johnson. The Higher Education Act (HEA) of 1965 was enacted to support postsecondary education. I assert that these policy outputs have contributed to the dramatic increase in the supply of college graduates since 1960. This study begins with emphasizing the Soviet launching of Sputnik and educational reform in early 1960s in U.S. as a cause and effect relationship. Analysis focuses on the policy process of educational reform by applying Kingdon’s multiple streams model, and on the economic effects of increase in the supply of college graduates by applying Acemoglu’s theory, the pooling and separating equilibria (1999). According to Acemoglu, economy transitions from initial pooling equilibrium to separating equilibrium as supply of high skilled labor increases and thus labor markets ii show different patterns in unemployment rates and wage structures for skilled and unskilled, as well as job mismatch. I find that occupational segregation at the state labor markets increases corresponding to supply of college graduates, and overeducation decreases as occupational segregation increases. Moreover, occupational segregation has positive wage effects and wage penalty from overeducation becomes smaller in states where occupations are more separated between the skilled and the unskilled. College graduates earn more wage premiums in states where occupations are more separated between the skilled and the unskilled. iii DEDICATION To my father & mother: I thank God for allowing us to have so much time together. Thanks for your endurance and support of this rotten kid. I wish medical technology can soon give hope to my father and other people who are suffering from Parkinson’s disease. iv ACKNOWLEDGMENTS Thanks to Dr. Robert Tollison. Since when I was in the Economics Department, I have taken all of your classes and you always encouraged me and other students in your class, and gave me your helpful hands generously and freely whenever I needed help. Thanks to Dr. Holley Ulbrich for your precious feedbacks and comments for improving this paper. I really enjoyed conversations with you in your classes. When I needed to talk to someone, you were there and listened to me. Thanks to Dr. Joseph Stewart your willingness to serve on the committee and all of your precious feedbacks and recommendations. Thanks to Dr. Frankie Felder and Dr. Christopher Ruth for all of your aid in helping me to graduate this semester. You two gave me hope when I felt low. Thanks to my friend Ahmed and his wife Omnia for your concerns and encouragements when I went through difficult times. Thanks to Virginia Caswell and Mack Caswell for your concern for me always. Thanks to my friend Dean Krupp and his family. If I did not know Jesus Christ, we would have not known each other. Thanks for the long time you were there as a friend. Without your help, I would not have finished this dissertation. I am especially grateful to Dr. Curtis Simon: “It is not the healthy who need a doctor, but the sick” (Luke 5:31). When I was a weed in the field, you taught me and made me a useful human capital. Only a good teacher can turn a weed into an effective human capital. I am sinning God with gratitude in my heart. To God be the glory, for He has done glorious things. v TABLE OF CONTENTS Page TITLE PAGE .................................................................................................................... i ABSTRACT ..................................................................................................................... ii DEDICATION and ACKNOWLEDGMENTS .............................................................. iii LIST OF TABLES ........................................................................................................ viii LIST OF FIGURES ........................................................................................................ ix CHAPTER I. Introduction .................................................................................................... 1 II. Literature Review........................................................................................... 9 1. Change in Wage Structure ................................................................... 9 2. Theory about Existence of Overeducation ......................................... 12 3. Overeducation: Permanent or Transitory? ......................................... 13 4. Measurement of Required Education................................................. 15 5. Duncan-Hoffman and Verdugo-Verdugo .......................................... 16 6. Job Mismatch and Productivity ......................................................... 18 7. Quantile Regression ........................................................................... 19 8. Unobserved Heterogeneity................................................................. 20 III. Hypothetical Framework ............................................................................. 23 1. Arms Race Model .............................................................................. 24 1-1. Richardson’s Arms Race Model .............................................. 25 1-2. Prisoner’s Dilemma Game....................................................... 26 1-3. Competitive Arms Accumulation Model ................................ 27 2. Agenda Setting .................................................................................... 29 2-1. Problem Stream ....................................................................... 30 2-2. Policy Stream ........................................................................... 34 2-3. Politics Stream ......................................................................... 37 vi Table of Contents (Continued) Page IV. Equality of Opportunity ............................................................................... 42 1. Paternalism ......................................................................................... 42 2. Public Choice ..................................................................................... 45 3. Expansion of Reform ......................................................................... 47 V. Policy Outputs and College Enrollments ..................................................... 52 1. National Science Foundation (NSF) .................................................. 52 2. National Defense Educational Act (NDEA) of 1958 ......................... 54 3. Higher Education Act (HEA) of 1965 ............................................... 56 4. College Enrollments........................................................................... 57 5. Sputnik-induced Federalism in American Educational System ......... 66 VI. Empirical Study ........................................................................................... 72 1. Summary Statistics............................................................................. 75 2. Empirical Specification ...................................................................... 88 3. Results ................................................................................................ 90 3-1. Wage Effects of Industry-Occupational Segregation ................. and Mismatch ......................................................................... 90 3-2. College Wage Premiums .....................................................
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