Local Human Capital Externalities: An Overlapping Generation Model and Some Evidence on Experience Premia
In an interesting and influential paper Robert Lucas (1993) considering the experience of East Asian small economies, suggests that 'on the job' learning could be the principal engine of their miraculous growth in the last 20 years. In this paper I develop an overlapping generation model where on the job learning, via local spillovers and local interactions, is the main channel of human capital accumulation in small open economies (as cities). The model predicts that skills' accumulation, due to experience in the local environment, has an effect on the experience premia of the workers and on the dispersion of their wages. I find the balanced growth path of the model and I simulate the adj ustment path after a technological shock. The second part of the paper conveys some suggestive evidence on what local characteristics affect the accumulation of skills, using data from 236 U.S. cities. Local characteristics which seem to have a strong imp act on the accumulation of skills are the \rdblquote technological intensity\rdblquote of the local manufacturing sector, the average level of education and the density of teachers in the city. This seems to confirm that the 'quality' of local environments is very important for skills' accumulation.
|Date of creation:||1999|
|Date of revision:|
|Contact details of provider:|| Postal: Poschingerstrasse 5, 81679 Munich|
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo-group.de
More information through EDIRC
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.:
- Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
- Antonio Ciccone & Robert E. Hall, 1995.
"Productivity and the density of economic activity,"
Economics Working Papers
120, Department of Economics and Business, Universitat Pompeu Fabra.
- Rauch James E., 1993.
"Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities,"
Journal of Urban Economics,
Elsevier, vol. 34(3), pages 380-400, November.
- James E. Rauch, 1991. "Productivity Gains From Geographic Concentration of human Capital: Evidence From the Cities," NBER Working Papers 3905, National Bureau of Economic Research, Inc.
- Topel, Robert H, 1991.
"Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority,"
Journal of Political Economy,
University of Chicago Press, vol. 99(1), pages 145-76, February.
- Robert H. Topel, 1990. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," NBER Working Papers 3294, National Bureau of Economic Research, Inc.
- Jess Gaspar & Edward L. Glaeser, 1996.
"Information Technology and the Future of Cities,"
Harvard Institute of Economic Research Working Papers
1756, Harvard - Institute of Economic Research.
- repec:hoo:wpaper:e-94-11 is not listed on IDEAS
- Glaeser, Edward L & Mare, David C, 2001.
"Cities and Skills,"
Journal of Labor Economics,
University of Chicago Press, vol. 19(2), pages 316-42, April.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Paul Krugman, 1990.
"Increasing Returns and Economic Geography,"
NBER Working Papers
3275, National Bureau of Economic Research, Inc.
- Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-92, June.
- 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.
When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_219. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe)
If references are entirely missing, you can add them using this form.