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Human Capital and Productivity in US Cities

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  • Giovanni Peri

Abstract

In an empirical analysis, considering 236 U.S. cities in the period 1980-1990, we document a strong positive correlation between local supply of education skills and their return. In SMSA’s where the average education of workers is high the education premium is also high. This is true both considering the levels of the variables in 1980, 1990 and considering their changes. Technical progress, as well as physical capital investments, may be driven by local pressures to enhance the productivity of factors which are locally abundant. Therefore we may interpret this regularity as a sign that in cities where educated workers are abundant, firms will invest in skill-complementary machines and techniques. Acemoglou (1998) claims that this idea could explain the time evolution of education premia in the 80’s. Here I bring some compelling evidence that it may provide an explanation for the behavior of education premia across cities.

Suggested Citation

  • Giovanni Peri, "undated". "Human Capital and Productivity in US Cities," Working Papers 138, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    • Handle: RePEc:igi:igierp:138
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    References listed on IDEAS

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    Cited by:

    1. Esteban Sanroma Melendez & Raul Ramos Lobo, 2001. "Capital humano local y productividad en las provincias espanolas," Working Papers in Economics 71, Universitat de Barcelona. Espai de Recerca en Economia.
    2. Esteban Sanroma & Raul Ramos, 2007. "Local Human Capital and Productivity: An Analysis for the Spanish Regions," Regional Studies, Taylor & Francis Journals, vol. 41(3), pages 349-359.
    3. Ramos, Raul & Sanroma, Esteban, 1999. "Local human capital and external economies: evidence for Spain," ERSA conference papers ersa99pa309, European Regional Science Association.

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