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Reinventing the Skilled Region: Human Capital Externalities and Industrial Change

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Author Info
Daniel F. Heuermann (Institute for Labour Law and Industrial Relations in the EC, University of Trier)

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Abstract

Bridging the gap between the literatures on industrial change and human capital externalities we investigate the joint importance of aggregate regional education and job turnover for productivity effects to arise within firms and regional industries. On the level of regional industries we find strong evidence for the mutual dependence of skills and change inasmuch as regional human capital is a crucial ingredient for industrial change to be productivity enhancing, while human capital externalities arise first and foremost in dynamic labor markets. On the firm level, we find human capital externalities to accrue predominantly to growing firms which benefit from sharing, matching, and learning externalities arising from a large supply of human capital in skilled, dynamic labor markets. Despite the joint impact of human capital and industrial change on productivity we find only weak evidence that inter-industry differences in labor market dynamics of highly qualified workers shape the geography of industry location across German regions.

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Paper provided by Institute of Labour Law and Industrial Relations in the European Community (IAAEG) in its series Discussion Papers with number 200902.

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Length: 38 pages
Date of creation: Apr 2009
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Handle: RePEc:iaa:wpaper:200902

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Related research
Keywords: Human Capital Externalities; Job Turnover; Industrial Change;

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Find related papers by JEL classification:
D62 - Microeconomics - - Welfare Economics - - - Externalities
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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