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Human capital and wages: evidence for external effects from the UK regions

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  • Vassilis Monastiriotis

Abstract

A large panel of regional UK data is used to provide detailed estimates of the direct and external effects of education and labour market experience on wages. The results offer strong evidence in support of the predictions of the endogenous growth theory (Lucas, 1988), where the - spatial or sectoral - concentration of human capital is expected to generate increasing returns in the production process. The findings are stronger for labour market experience, while no supportive evidence is found for the case of years of schooling. Possibly, better data on the quality of educational qualifications could offer a better measurement of the external education effects.

Suggested Citation

  • Vassilis Monastiriotis, 2002. "Human capital and wages: evidence for external effects from the UK regions," Applied Economics Letters, Taylor & Francis Journals, vol. 9(13), pages 843-846.
    • Handle: RePEc:taf:apeclt:v:9:y:2002:i:13:p:843-846
    DOI: 10.1080/13504850210148198
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    References listed on IDEAS

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    1. Esteban, J., 2000. "Regional convergence in Europe and the industry mix: a shift-share analysis," Regional Science and Urban Economics, Elsevier, vol. 30(3), pages 353-364, May.
    2. Winter-Ebmer, Rudolf, 1994. "Endogenous Growth, Human Capital, and Industry Wages," Bulletin of Economic Research, Wiley Blackwell, vol. 46(4), pages 289-314, October.
    3. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    4. Chris Sakellariou, 2001. "Identifying the external effects of human capital: a two-stage approach," Applied Economics Letters, Taylor & Francis Journals, vol. 8(3), pages 191-194.
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    Cited by:

    1. Kaplanis, Ioannis, 2010. "Wage effects from changes in local human capital in Britain," LSE Research Online Documents on Economics 33615, London School of Economics and Political Science, LSE Library.
    2. Helena Marques, 2005. "The skilled u-shaped Europe: is it really and on which side does it stand?," Applied Economics, Taylor & Francis Journals, vol. 37(19), pages 2205-2220.
    3. Helena Marques & Hugh Metcalf, 2003. "Extending the EU Single Market Eastwards: Sectoral Trade and Real Wage Effects," Discussion Paper Series 2003_10, Department of Economics, Loughborough University, revised Oct 2003.
    4. Rudiger Ahrend & Emily Farchy & Ioannis Kaplanis & Alexander C. Lembcke, 2017. "What Makes Cities More Productive? Evidence From Five Oecd Countries On The Role Of Urban Governance," Journal of Regional Science, Wiley Blackwell, vol. 57(3), pages 385-410, June.
    5. Elsie Echeverri‐Carroll & Sofia G. Ayala, 2009. "Wage differentials and the spatial concentration of high‐technology industries," Papers in Regional Science, Wiley Blackwell, vol. 88(3), pages 623-641, August.
    6. Rudiger Ahrend & Emily Farchy & Ioannis Kaplanis & Alexander C. Lembcke, 2015. "What Makes Cities More Productive? Agglomeration Economies and the Role of Urban Governance: Evidence from 5 OECD Countries," SERC Discussion Papers 0178, Centre for Economic Performance, LSE.
    7. Helena Marques & Hugh Metcalf, 2009. "Manufacturing Wages In The Enlarged Eu: The Role Of Neighbour‐Country Effects," Manchester School, University of Manchester, vol. 77(1), pages 65-81, January.
    8. Marco Di Cataldo & Licia Ferranna & Margherita Gerolimetto & Stefano Magrini, 2023. "Splitting Up or Dancing Together? Local Institutional Structure and the Performance of Urban Areas," Economic Geography, Taylor & Francis Journals, vol. 99(1), pages 81-110, January.
    9. Helena Marques & Hugh Metcalf, 2003. "Wage Gradients in an Enlarged EU," Discussion Paper Series 2003_13, Department of Economics, Loughborough University, revised Dec 2003.
    10. Ian Gordon & Vassilis Monastiriotis, 2007. "Education, Location, Education: A Spatial Analysis of English Secondary School Public Examination Results," Urban Studies, Urban Studies Journal Limited, vol. 44(7), pages 1203-1228, June.
    11. Ahrend, Rudiger & Farchy, Emily & Kaplanis, Ioannis & Lembcke, Alexander C., 2016. "What Makes Cities More Productive? Evidence from 5 OECD Countries on the Role of Urban Governance," Beiträge zur Jahrestagung 2016 (Witten/Herdecke) 175187, Verein für Socialpolitik, Ausschuss für Wirtschaftssysteme und Institutionenökonomik.
    12. Helena Marques & Hugh Metcalf, 2006. "Ending Restrictions To Migration From The New Eu Member Countries: Sectoral Trade And Real Wage Effects," Contemporary Economic Policy, Western Economic Association International, vol. 24(2), pages 287-299, April.

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