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Bohemians, human capital and regional economic growth

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Author Info
Oliver Falck () (Ifo Institute for Economic Research)
Michael Fritsch () (University of Jena)
Stephan Heblich () (Max Planck Institute of Economics, Entrepreneurship, Growth, and Public Policy)

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Abstract

An emerging literature on the geography of bohemians argues that a region’s lifestyle and cultural amenities explain, at least partly, the unequal distribution of highly qualified people across space, which in turn, explains geographic disparities in economic growth. However, to date, there has been little or no empirical attempt to identify a causal relation. To identify the causal impact of bohemians on economic growth, we apply an instrumental variable approach using as an exogenous instrument the geographic distribution of bohemians prior to the Industrial Revolution in Germany. This distribution was primary the result of competition for prestige between courts and not of economic prosperity. Accordingly, the instrument is independent of today’s regional economic development. Focusing on the concentration of highly skilled people today that is explained by the proximity to exogenous concentrations of bohemians, the observed local average treatment effect supports the hypothesis of a positive impact of bohemians on regional economic development.

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Publisher Info
Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2009/12.

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Length: 32 pages
Date of creation: 2009
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Handle: RePEc:ieb:wpaper:2009/7/doc2009-12

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Related research
Keywords: Regional Growth; Human Capital; Bohemians; Instrumental Variables;

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Find related papers by JEL classification:
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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