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Human Capital Externalities and Growth of High- and Low-Skilled Jobs

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  • Suedekum, Jens

    ()
    (University of Duisburg-Essen)

Abstract

In this paper I analyze the impact of human capital on local employment growth for the case of West Germany (1977-2002). I find robust evidence that skilled cities grow faster than unskilled ones, but this need not indicate localized human capital externalities are at work. A large initial share of high-skilled workers significantly reduces subsequent growth of high-skilled jobs. The observed positive impact on total employment growth is, therefore, due to the fact that low-skilled jobs grow faster than high-skilled jobs decline in initially skilled cities. This evidence is in line with complementarities among skill groups as the major causal link between human capital and employment growth. It challenges theories of self-reinforcing spatial concentration of high-skilled workers due to strong localized spillovers.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1969.

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Length: 28 pages
Date of creation: Feb 2006
Date of revision:
Publication status: published in: Jahrbücher für Nationalökonomie und Statistik (Journal of Economics and Statistics), 2010, 230 (1), 92-114
Handle: RePEc:iza:izadps:dp1969

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Keywords: externalities; local employment growth; human capital;

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References

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  1. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Vincenzo Verardi & Joachim Wagner, 2010. "Robust Estimation of Linear Fixed Effects Panel Data Models with an Application to the Exporter Productivity Premium," Working Paper Series in Economics 168, University of Lüneburg, Institute of Economics.
  2. Jan Wedemeier, 2011. "Creative professionals and high-skilled agents': Polarization of employment growth?," ERSA conference papers ersa11p489, European Regional Science Association.
  3. Ana Maria DIAZ ESCOBAR, 2011. "The Employment Advantages of Skilled Urban Areas," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011015, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  4. Hartmut Egger & Gabriel J Felbermayr, 2009. "Endogenous Skill Formation and the Source Country Effects of Emigration," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 308/2009, Department of Economics, University of Hohenheim, Germany.

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