Human Capital and Employment Growth in German Metropolitan Areas: New Evidence
AbstractGerman metropolitan areas with more highly skilled workers became increasingly skilled between 1975 and 2003, and this has important implications for urban employment growth.Using for the first time German metropolitan areas instead of administrative regions we show that the share of college graduates affects growth by the same magnitude as it does in US MSAs. However, conventional estimators are biased upwards. Correcting for the endogeneity of initial employment and solving a common problem of under-identification shows that the effect is at least a third smaller and closer to 0.5% employment growth for a 10% increase in the concentration of skilled workers. The effect is robust to various controls across two data sets. We additionally question the view that aggregate productivity growth is solely due to college graduates. After distinguishing between six different skill levels we find positive growth effects of high school graduates with vocational training, especially if the local concentration of technical professionals is high. The concentration of non-technical university graduates becomes more important over time, but has less bearing on the marginal growth effects of other skill groups. City success may thus depend on the 'right' combination of skills as well as college graduates.
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Bibliographic InfoPaper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 209.
Date of creation: Apr 2009
Date of revision:
human capital; skills; city employment growth; Germany; GMM estimation;
Other versions of this item:
- Steven Poelhekke, 2013. "Human Capital and Employment Growth in German Metropolitan Areas: New Evidence," Regional Studies, Taylor and Francis Journals, vol. 47(2), pages 245-263, February.
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
- R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-23 (All new papers)
- NEP-EDU-2009-05-23 (Education)
- NEP-GEO-2009-05-23 (Economic Geography)
- NEP-HRM-2009-05-23 (Human Capital & Human Resource Management)
- NEP-LAB-2009-05-23 (Labour Economics)
- NEP-URE-2009-05-23 (Urban & Real Estate Economics)
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- Valerien O. Pede & Raymond J.G.M. Florax & Henri L.F. de Groot, 2011. "Technological Leadership and Sectoral Employment Growth:A Spatial Econometric Analysis for U.S. Counties," Working Papers 11-1, Purdue University, College of Agriculture, Department of Agricultural Economics.
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