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Spillovers from Local Market Human Capital and the Spatial Distribution of Productivity in Malaysia

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Author Info
Timothy Conley (University of Chicago, GSB)
Fredrick Flyer (Lexecon, Inc.)
Grace Tsiang (University of Chicago)
Abstract

This paper examines whether spillovers from local market human capital are important in explaining the distribution of productivity across Malaysia. We develop an empirical method for describing local human capital distributions based on the idea that spillovers are limited in scope by costs of interaction or economic distance between agents. We use estimates of the economic distance between agents to construct measures of local market human capital based on schooling rates of the population within a given radius. These measures are then used in estimating equations obtained from a simple local public goods model. Our regressions are estimated using spatial GMM, allowing for general spatial correlation across observations as a function of economic distance. We find positive wage and rent differentials associated with local human capital, evidence consistent with productive human capital spillovers. Our results for rent differentials obtain with two distinct human capital measures; however, those for wage differentials depend on the human capital measure used.

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Publisher Info
Article provided by Berkeley Electronic Press in its journal Advances in Economic Analysis & Policy.

Volume (Year): 3 (2003)
Issue (Month): 1 ()
Pages: 1229-1229
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Related research
Keywords: Human Capital Spillovers Local Public Goods Spatial GMM

Find related papers by JEL classification:
C5 - Mathematical and Quantitative Methods - - Econometric Modeling

References listed on IDEAS
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  4. Case, Anne C, 1991. "Spatial Patterns in Household Demand," Econometrica, Econometric Society, vol. 59(4), pages 953-65, July. [Downloadable!] (restricted)
  5. Jovanovic, Boyan & Rob, Rafael, 1990. "Long Waves and Short Waves: Growth through Intensive and Extensive Search," Econometrica, Econometric Society, vol. 58(6), pages 1391-1409, November. [Downloadable!] (restricted)
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  6. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November. [Downloadable!] (restricted)
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  7. James P. Smith, 2004. "Labor Markets and Economic Development in Malaysia," Labor and Demography 0403021, EconWPA. [Downloadable!]
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  8. Benabou, Roland, 1996. "Equity and Efficiency in Human Capital Investment: The Local Connection," Review of Economic Studies, Blackwell Publishing, vol. 63(2), pages 237-64, April. [Downloadable!] (restricted)
  9. Alex Anas & Richard Arnott & Kenneth A. Small, 1998. "Urban Spatial Structure," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1426-1464, September. [Downloadable!] (restricted)
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  10. Blomquist, Glenn C & Berger, Mark C & Hoehn, John P, 1988. "New Estimates of Quality of Life in Urban Areas," American Economic Review, American Economic Association, vol. 78(1), pages 89-107, March. [Downloadable!] (restricted)
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  12. James P. Smith & Duncan Thomas, 2004. "On the Road: Marriage and Mobility in Malaysia," Labor and Demography 0403019, EconWPA. [Downloadable!]
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  13. Gyourko, Joseph & Tracy, Joseph, 1991. "The Structure of Local Public Finance and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 774-806, August. [Downloadable!] (restricted)
  14. Topel, Robert H, 1986. "Local Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S111-43, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Conley, Timothy G. & Molinari, Francesca, 2005. "Spatial Correlation Robust Inference with Errors in Location or Distance," Working Papers 05-12, Cornell University, Center for Analytic Economics. [Downloadable!]
    Other versions:
  2. Isacsson, Gunnar, 2005. "External effects of education on earnings: Swedish evidence using matched employee-establishment data," Working Paper Series 2005:10, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
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