2000
DOI: 10.2139/ssrn.242708
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Human Capital and Externalities in Cities

Abstract: Abstract:We combine growth theory with US Census data on individual schooling and wages to estimate the aggregate return to human capital and human capital externalities in cities. Our estimates imply that a one-year increase in average schooling in cities increases their aggregate labor productivity by 8 to 11 percent. We find no evidence for aggregate human capital externalities in cities however although we use three different approaches. Our main theoretical contribution is to show how human capital extern… Show more

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Cited by 14 publications
(12 citation statements)
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“…There is an existing literature that investigates the linkages between the fraction of skilled workers and the labour market outcomes of the less‐skilled (see Acemoglu and Angrist, 2000; Moretti, 2002, 2003, 2004; Ciccone and Peri, 2002) that is motivated primarily by interest in the hypothesis of estimating the extent of human capital externalities that is one potential source of agglomeration economies 6 . These studies focus on the effect of the proportion of skilled workers in a city on the producer wage of unskilled workers as this is what is appropriate for their question of interest.…”
Section: Empirical Evidencementioning
confidence: 94%
“…There is an existing literature that investigates the linkages between the fraction of skilled workers and the labour market outcomes of the less‐skilled (see Acemoglu and Angrist, 2000; Moretti, 2002, 2003, 2004; Ciccone and Peri, 2002) that is motivated primarily by interest in the hypothesis of estimating the extent of human capital externalities that is one potential source of agglomeration economies 6 . These studies focus on the effect of the proportion of skilled workers in a city on the producer wage of unskilled workers as this is what is appropriate for their question of interest.…”
Section: Empirical Evidencementioning
confidence: 94%
“…This choice is essentially motivated by three reasons. First, LLMs are "self-contained" labor markets, since by definition they are characterized 9 However, there might ultimately be decreasing returns to the agglomeration of high skills (Benabou, 1993; see also Ciccone and Peri, 2000). Note also that in the short term, an imperfect substitution of workers with different levels of human capital could reduce returns to education in the most agglomerated areas by creating an excess supply of highly educated workers in large cities (see Moretti, 2004), forcing some of the most skilled workers to fill vacancies requiring lower levels of qualification (which would worsen the quality of the average match).…”
Section: Data and Descriptive Evidencementioning
confidence: 99%
“…Roback (1982) and Kahn (1995) emphasize the relationship between local amenities and wages and land rents within cities. Rauch (1993) and Moretti (1998) provide empirical evidence of city-level human capital externalities, although Ciccone and Peri (2000) argue that these disappear when one controls for the potential complementarity between workers with different levels of human capital. Glaeser and Mare (1994) stress the role of human capital accumulation in explaining the urban wage premium.…”
Section: Endnotesmentioning
confidence: 99%