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How Large are Local Human Capital Spillovers?: Evidence from Korea

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  • Park, Woo Ram

Abstract

This paper examines the empirical magnitude of local human capital spillovers in Korea during the 1980s and mid-1990s. Local human capital spillovers exists if plants in regions with a higher level of human capital can produce more given their own amount of input (Moretti 2004c). In particular, this paper explores an educational reform in South Korea which exogenously induced a large amount of variation in regional human capital levels. Using annually collected plant level data, I explore the effect of changes in the regional human capital levels induced by this reform on plant productivity in Korea. My results suggest that this effect is limited. I find a positive correlation between a regional level of human capital and plant productivity. However, after further addressing endogeneity using an instrumental variable, the effect of the overall regional human capital level on productivity decreases and becomes statistically insignificant.

Suggested Citation

  • Park, Woo Ram, 2016. "How Large are Local Human Capital Spillovers?: Evidence from Korea," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 38(4), pages 77-94.
    • Handle: RePEc:zbw:kdijep:200799
    DOI: 10.23895/kdijep.2016.38.4.77
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    References listed on IDEAS

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    More about this item

    Keywords

    Local Human Capital Spillovers; Plant Productivity; Instrumental Variable; College Education; South Korea;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I20 - Health, Education, and Welfare - - Education - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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