The role of firm-level and regional human capital for the social returns to education - Evidence from German social security data
AbstractThis paper provides first evidence on the anatomy of human capital externalities arising from both firm-level and regional human capital. Using panel data from German social security records, both at an individual and aggregated at the plant and regional level, I estimate earnings functions incorporating measures of regional and firm-level human capital while controlling for various types of unobserved heterogeneity. The results suggest that the firm-level share of high-skilled workers generates positive, although small social returns to education for low-skilled and skilled workers but not for the high-skilled. This finding is in line with learning based theories of human capital externalities. Some estimates also suggest negative social returns for the regional shares of low-skilled workers. No such effects are found for the firm-level shares of low-skilled workers and the regional shares of high-skilled workers.
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Bibliographic InfoPaper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 126.
Length: 43 pages
Date of creation: Apr 2009
Date of revision:
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Web page: http://leuphana.de/institute/ivwl.html
Human capital externalities; social returns to education; error-component model;
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
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-16 (All new papers)
- NEP-EDU-2009-05-16 (Education)
- NEP-HRM-2009-05-16 (Human Capital & Human Resource Management)
- NEP-LAB-2009-05-16 (Labour Economics)
- NEP-URE-2009-05-16 (Urban & Real Estate Economics)
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