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Human Capital and Regional Development

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  • Nicola Gennaioli
  • Rafael Laporta
  • Florencio Lopez-de-Silanes
  • Andrei Schleifer

Abstract

We investigate the determinants of regional development using a newly constructed database of 1569 sub-national regions from 110 countries covering 74 percent of the world's surface and 96 percent of its GDP. We combine the cross-regional analysis of geographic, institutional, cultural, and human capital determinants of regional development with an examination of productivity in several thousand establishments located in these regions. To organize the discussion, we present a new model of regional development that introduces into a standard migration framework elements of both the Lucas (1978) model of the allocation of talent between entrepreneurship and work, and the Lucas (1988) model of human capital externalities. The evidence points to the paramount importance of human capital in accounting for regional differences in development, but also suggests from model estimation and calibration that entrepreneurial inputs and human capital externalities are essential for understanding the data.

Suggested Citation

  • Nicola Gennaioli & Rafael Laporta & Florencio Lopez-de-Silanes & Andrei Schleifer, 2011. "Human Capital and Regional Development," Working Papers 581, Barcelona School of Economics.
  • Handle: RePEc:bge:wpaper:581
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    More about this item

    Keywords

    human capital; development; Regional Economics;
    All these keywords.

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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