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Smart Cities: Explaining the Relationship between City Growth and Human Capital

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Author Info
Jesse M. Shapiro (Harvard University)

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Abstract

From 1940 to 1990, a 10 percent increase in a metrpolitan area’s concentration of college-educated residents was associated with a .6 percent increase in subsequent employment growth. Using data on growth in wages and house values, I attempt to distinguish between explanations for this correlation based on local productivity growth, and explanations based on growth in local consumption amenities. Calibration of a city growth model suggests that roughly two-thirds of the growth effect of human capital is due to enhanced productivity growth, the rest being caused by growth in the quality of life. This contrasts with the standard argument that human capital generates growth in urban areas solely through local knowledge spillovers.

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File URL: http://129.3.20.41/eps/urb/papers/0309/0309001.pdf
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Publisher Info
Paper provided by EconWPA in its series Urban/Regional with number 0309001.

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Length: 24 pages
Date of creation: 04 Sep 2003
Date of revision:
Handle: RePEc:wpa:wuwpur:0309001

Note: Type of Document - Acrobat PDF; prepared on IBM PC ; to print on HP; pages: 24 ; figures: included
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Related research
Keywords: city growth; human capital; hedonics;

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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

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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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    Other versions:
  3. Cragg, Michael & Kahn, Matthew, 1997. "New Estimates of Climate Demand: Evidence from Location Choice," Journal of Urban Economics, Elsevier, vol. 42(2), pages 261-284, September. [Downloadable!] (restricted)
    Other versions:
  4. Duncan Black & Vernon Henderson, 1999. "A Theory of Urban Growth," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 252-284, April. [Downloadable!] (restricted)
  5. Simon, Curtis J., 1998. "Human Capital and Metropolitan Employment Growth," Journal of Urban Economics, Elsevier, vol. 43(2), pages 223-243, March. [Downloadable!] (restricted)
  6. Alan Krueger, 1999. "Measuring Labor's Share," NBER Working Papers 7006, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Edward L. Glaeser & Jesse M. Shapiro, 2003. "The Benefits of the Home Mortgage Interest Deduction," NBER Chapters, in: Tax Policy and the Economy, Volume 17, pages 37-82 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  8. Gyourko, Joseph & Tracy, Joseph, 1991. "The Structure of Local Public Finance and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 774-806, August. [Downloadable!] (restricted)
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  11. Daron Acemoglu & Joshua Angrist, 1999. "How Large are the Social Returns to Education? Evidence from Compulsory Schooling Laws," NBER Working Papers 7444, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Blomquist, Glenn C & Berger, Mark C & Hoehn, John P, 1988. "New Estimates of Quality of Life in Urban Areas," American Economic Review, American Economic Association, vol. 78(1), pages 89-107, March. [Downloadable!] (restricted)
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  14. Julie Berry Cullen & Steven D. Levitt, 1999. "Crime, Urban Flight, And The Consequences For Cities," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 159-169, May. [Downloadable!] (restricted)
    Other versions:
  15. Enrico Moretti, 2003. "Human Capital Externalities in Cities," NBER Working Papers 9641, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  16. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
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. Edward L. Glaeser & Albert Saiz, 2003. "The Rise of the Skilled City," NBER Working Papers 10191, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Guido de Blasio, 2006. "Production or consumption? Disentangling the skill-agglomeration connection," Temi di discussione (Economic working papers) 571, Bank of Italy, Economic Research Department. [Downloadable!]
  3. Guido De Blasio, 2005. "Production Or Consumption? Disentangling The Skill-Agglomeration Connection," ERSA conference papers ersa05p648, European Regional Science Association. [Downloadable!]
  4. Daniel F. Heuermann, 2009. "Career Networks and Job Matching - Evidence on the Microeconomic Foundations of Human Capital Externalities," Discussion Papers 200901, Institute of Labour Law and Industrial Relations in the European Community (IAAEG). [Downloadable!]
  5. Alberto Dalmazzo & Guido de Blasio, 2005. "Where do human capital externalities end up?," Temi di discussione (Economic working papers) 554, Bank of Italy, Economic Research Department. [Downloadable!]
  6. Alberto Dalmazzo & Guido De Blasio, 2005. "Where Do Human Capital Externalities End Up To?," ERSA conference papers ersa05p628, European Regional Science Association. [Downloadable!]
  7. Shihe Fu, 2005. "Smart Cafe Cities: Testing Human Capital Externalities in the Boston Metropolitan Area," Working Papers 05-24, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
    Other versions:
  8. Terance J. Rephann, 2008. "Community Colleges and Local Economic Development," Working Papers 2008-02, Center for Economic and Policy Studies. [Downloadable!]
  9. Daniel F. Heuermann, 2009. "Reinventing the Skilled Region: Human Capital Externalities and Industrial Change," Discussion Papers 200902, Institute of Labour Law and Industrial Relations in the European Community (IAAEG). [Downloadable!]
  10. Shihe Fu, 2005. "What Has Been Capitalized into Property Values: Human Capital, Social Capital, or Cultural Capital?," Working Papers 05-25, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
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