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Inside the black box of regional development: human capital, the creative class and tolerance

  • Richard Florida
  • Charlotta Mellander
  • Kevin Stolarick

While there is a general consensus on the importance of human capital to regional development, debate has emerged around two key issues. The first involves the efficacy of educational versus occupational measures (i.e. the creative class) of human capital, while the second revolves around the factors that effect its distribution. We use structural equation models and path analysis to examine the effects of these two alternative measures of human capital on regional income and wages, and also to isolate the effects of tolerance, consumer service amenities, and the university on its distribution. We find that human capital and the creative class effect regional development through different channels. The creative class outperforms conventional educational attainment measures in accounting for regional labor productivity measured as wages, while conventional human capital does better in accounting for regional income. We find that tolerance is significantly associated with both human capital and the creative class as well as with wages and income.

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Article provided by Oxford University Press in its journal Journal of Economic Geography.

Volume (Year): 8 (2008)
Issue (Month): 5 (September)
Pages: 615-649

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Handle: RePEc:oup:jecgeo:v:8:y:2008:i:5:p:615-649
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  1. Simon, Curtis J., 1998. "Human Capital and Metropolitan Employment Growth," Journal of Urban Economics, Elsevier, vol. 43(2), pages 223-243, March.
  2. Jesse M. Shapiro, 2006. "Smart Cities: Quality of Life, Productivity, and the Growth Effects of Human Capital," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 324-335, May.
  3. Barro, Robert J, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 407-43, May.
  4. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  5. Edward L. Glaeser & Jed Kolko & Albert Saiz, 2000. "Consumer City," Harvard Institute of Economic Research Working Papers 1901, Harvard - Institute of Economic Research.
  6. Robert J. Gordon, 2003. "Hi-tech Innovation and Productivity Growth: Does Supply Create Its Own Demand?," NBER Working Papers 9437, National Bureau of Economic Research, Inc.
  7. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  8. Maryann Feldman & Roger Martin, 2004. "Jurisdictional Advantage," NBER Working Papers 10802, National Bureau of Economic Research, Inc.
  9. Christopher R. Berry & Edward L. Glaeser, 2005. "The Divergence of Human Capital Levels Across Cities," NBER Working Papers 11617, National Bureau of Economic Research, Inc.
  10. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-78, December.
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