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Human Capital and Externalities in Cities

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  • Antonio Ciccone
  • Giovanni Peri

Abstract

We combine growth theory with US Census data on individual schooling and wages to estimate the aggregate return to human capital and human capital externalities in cities. Our estimates imply that a one-year increase in average schooling in cities increases their aggregate labor productivity by 8 to 11 percent. We find no evidence for aggregate human capital externalities in cities however. Our main theoretical contribution is to show how aggregate human capital externalities can be identified when workers with different human capital are imperfect substitutes in production.

Suggested Citation

  • Antonio Ciccone & Giovanni Peri, "undated". "Human Capital and Externalities in Cities," Working Papers 172, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  • Handle: RePEc:igi:igierp:172
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Sabrina Di Addario & Eleonora Patacchini, 2006. "Is there an urban wage premium in Italy?," Temi di discussione (Economic working papers) 570, Bank of Italy, Economic Research and International Relations Area.
    2. Mori, Tomoya & Turrini, Alessandro, 2005. "Skills, agglomeration and segmentation," European Economic Review, Elsevier, vol. 49(1), pages 201-225, January.
    3. Alejandro Diaz Bautista & Mauro Diaz Dominguez, 2004. "Capital Humano y Crecimiento Económico en México (1970-2000). Human Capital and Economic Growth in Mexico," Urban/Regional 0405008, University Library of Munich, Germany.
    4. Huw Lloyd-Ellis, 2003. "On the Impact of Inequality on Productivity Growth in the Short and Long Term: A Synthesis," Canadian Public Policy, University of Toronto Press, vol. 29(s1), pages 65-86, January.
    5. Di Addario, Sabrina & Patacchini, Eleonora, 2008. "Wages and the City. Evidence from Italy," Labour Economics, Elsevier, vol. 15(5), pages 1040-1061, October.
    6. Guido De Blasio & Sabrina Di Addario, 2002. "Labor Market Pooling," IMF Working Papers 02/121, International Monetary Fund.
    7. Daron Acemoglu & Joshua Angrist, 1999. "How Large are the Social Returns to Education? Evidence from Compulsory Schooling Laws," NBER Working Papers 7444, National Bureau of Economic Research, Inc.
    8. Ron Vreeker, 2004. "Urban Multifunctional Land Use and Externalities," ERSA conference papers ersa04p346, European Regional Science Association.
    9. Henry Overman & Stephen Redding & Anthony J. Venables, 2001. "The Economic Geography of Trade, Production, and Income: A Survey of Empirics," CEP Discussion Papers dp0508, Centre for Economic Performance, LSE.
    10. Nicola D. Coniglio, 2002. "Regional Intergration and Migration: An Economic Geography Model with Hetergenous Labour Force," Working Papers 2003_1, Business School - Economics, University of Glasgow.
    11. Steve Gibbons, 2001. "Paying for good neighbours? Neighbourhood deprivation and the communiy benefits of education," CEE Discussion Papers 0017, Centre for the Economics of Education, LSE.
    12. M. Bellinzas, 2004. "Dinamiche demografiche, agglomerazione e determinanti economiche. Il caso italiano," Working Paper CRENoS 200407, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    13. Miki Malul, 2012. "A Dynamic Brain Drain in Peripheral Regions," ERSA conference papers ersa12p230, European Regional Science Association.
    14. Sabrina Di Addario & Eleonora Patacchini, 2005. "Wages and the City. The Italian case," Economics Series Working Papers 243, University of Oxford, Department of Economics.
    15. Giovanni Peri, 2001. "Young People, Skills and Cities," CESifo Working Paper Series 610, CESifo Group Munich.

    More about this item

    JEL classification:

    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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