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Local human capital externalities and wages at the firm level: Evidence from Italian manufacturing

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  • Bratti, Massimiliano
  • Leombruni, Roberto

Abstract

We exploit presumably exogenous variation in the availability of college-educated workers at the province level produced by a reform that increased the supply of higher education to estimate human capital production externalities for Italian manufacturing firms. We show that when the potential endogeneity of local human capital is addressed, the elasticity of white-collar workers’ wages with respect to the local college share is around 0.1, while we find no evidence of a positive effect of local human capital on blue-collar workers’ wages.

Suggested Citation

  • Bratti, Massimiliano & Leombruni, Roberto, 2014. "Local human capital externalities and wages at the firm level: Evidence from Italian manufacturing," Economics of Education Review, Elsevier, vol. 41(C), pages 161-175.
    • Handle: RePEc:eee:ecoedu:v:41:y:2014:i:c:p:161-175
    DOI: 10.1016/j.econedurev.2014.05.002
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    3. Luis Eduardo Arango & Gabriela Bonilla, 2015. "Human capital agglomeration and social returns to education in Colombia," Borradores de Economia 12788, Banco de la Republica.
    4. Elena Cottini & Paolo Ghinetti & Simone Moriconi, 2019. "Higher Education Supply, Neighbourhood Effects and Economic Welfare," CESifo Working Paper Series 7483, CESifo.
    5. Mu Lin & Jingxin Gao & Yongjie Du & Pengyu Ren, 2023. "Mismatch in Urban Construction Land Use and Economic Growth: Empirical Evidence from China," Land, MDPI, vol. 12(2), pages 1-21, February.
    6. Matteo Bugamelli & Francesca Lotti & Monica Amici & Emanuela Ciapanna & Fabrizio Colonna & Francesco D�Amuri & Silvia Giacomelli & Andrea Linarello & Francesco Manaresi & Giuliana Palumbo & Filippo , 2018. "Productivity growth in Italy: a tale of a slow-motion change," Questioni di Economia e Finanza (Occasional Papers) 422, Bank of Italy, Economic Research and International Relations Area.
    7. Penelope B. Prime & Donald Grimes & Mary Beth Walker, 2016. "Exploring Wage Determination by Education Level," Economic Development Quarterly, , vol. 30(3), pages 191-202, August.
    8. Möller, Joachim & Eppelsheimer, Johann, 2016. "The Wage Effects of Regional Brain Gain and Brain Drain Revisited," VfS Annual Conference 2016 (Augsburg): Demographic Change 145506, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Higher education; Local human capital externalities; Manufacturing; Productivity; Wages;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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