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Human Capital Spill-Overs Within the Workplace

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Author Info
Battu, Harminder (Department of Economics, University of Aberdeen)
Belfield, Clive R. (National Center for the Study of Privatization in Education, Teachers College, Columbia University)
Sloane, Peter J. () (Department of Economics, University of Aberdeen and IZA, Bonn)

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Abstract

An individual’s human capital has a strong influence on earnings. Yet individual, worker-level estimations of earnings rarely include the characteristics of co-workers or detailed firm-level controls. In this paper, we use a unique matched worker-workplace dataset to estimate the effect on own earnings of co-workers’ education. Our results, using the 1998 UK Workplace Employee Relations Survey, show significant effects. Own earnings premia fall slightly, but there is an independent, significantly positive effect from average workplace education. We also test for interactions between own and co-worker education levels. However, these interactions appear negative: education is valued less highly at workplaces where education levels are already high. This result runs counter to our theoretical prediction.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 404.

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Length: 29 pages
Date of creation: Nov 2001
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Handle: RePEc:iza:izadps:dp404

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Related research
Keywords: Educational economics; human capital; workplace performance;

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Find related papers by JEL classification:
I2 - Health, Education, and Welfare - - Education
J4 - Labor and Demographic Economics - - Particular Labor Markets

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. David. C. Maré, 2004. "Ideas for Growth?," Development and Comp Systems 0404007, EconWPA. [Downloadable!]
    Other versions:
  2. Hipolito , Simon, 2008. "International Differences in Wage Inequality: A New Glance with European Matched Employer-Employee Data," MPRA Paper 7932, University Library of Munich, Germany. [Downloadable!]
  3. Aniela Wirz, 2008. "Private returns to education versus education spill-over effects," Empirical Economics, Springer, vol. 34(2), pages 315-342, March. [Downloadable!] (restricted)
  4. Alcala, Francisco & Hernandez, Pedro J., 2005. "Firm characteristics, labor sorting, and wages," MPRA Paper 1226, University Library of Munich, Germany, revised 17 Jan 2007. [Downloadable!]
  5. Renuka Metcalfe & Peter J. Sloane, 2007. "Human Capital Spillovers and Economic Performance in the Workplace in 2004: Some British Evidence," IZA Discussion Papers 2774, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Alcala Agullo, Francisco & Hernández Martínez, Pedro Jesús, 2006. "Firms’ Main Market, Human Capital, and Wages," Annals of Computational Economics 4102, Murcia University, DIGITUM. Universidad de Murcia. [Downloadable!]
  7. Alison L Booth & Gylfi Zoega, 2005. "Worker Heterogeneity, Intra-firm Externalities and Wage Compression," Birkbeck Working Papers in Economics and Finance 0515, Birkbeck, Department of Economics, Mathematics & Statistics. [Downloadable!]
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