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Human Capital Externalities and Growth of High- and Low-Skilled Jobs

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  • Suedekum, Jens

    (Heinrich Heine University Düsseldorf)

Abstract

In this paper I analyze the impact of human capital on local employment growth for the case of West Germany (1977-2002). I find robust evidence that skilled cities grow faster than unskilled ones, but this need not indicate localized human capital externalities are at work. A large initial share of high-skilled workers significantly reduces subsequent growth of high-skilled jobs. The observed positive impact on total employment growth is, therefore, due to the fact that low-skilled jobs grow faster than high-skilled jobs decline in initially skilled cities. This evidence is in line with complementarities among skill groups as the major causal link between human capital and employment growth. It challenges theories of self-reinforcing spatial concentration of high-skilled workers due to strong localized spillovers.

Suggested Citation

  • Suedekum, Jens, 2006. "Human Capital Externalities and Growth of High- and Low-Skilled Jobs," IZA Discussion Papers 1969, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp1969
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    2. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    3. Verardi Vincenzo & Wagner Joachim, 2011. "Robust Estimation of Linear Fixed Effects Panel Data Models with an Application to the Exporter Productivity Premium," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(4), pages 546-557, August.
    4. Kim, Young-Joon & Song, Joonhyuk, 2014. "Romer Meets Heterogeneous Workers In An Endogenous Growth Model," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 55(2), pages 121-146, December.
    5. Simon FAUSER & Maurizio BAUSSOLA & Jürgen ROTH, 2008. "The Footprint of Innovation- Regional Labour Market Reactions to Macroeconomic Shocks," EcoMod2008 23800038, EcoMod.
    6. Ana María Díaz, 2011. "The Employment Advantages of Skilled Urban Areas," Vniversitas Económica 10087, Universidad Javeriana - Bogotá.
    7. Alessandra Faggian & Isha Rajbhandari & Kathryn R. Dotzel, 2017. "The interregional migration of human capital and its regional consequences: a review," Regional Studies, Taylor & Francis Journals, vol. 51(1), pages 128-143, January.
    8. Jan Wedemeier, 2011. "Creative professionals and high-skilled agents': Polarization of employment growth?," ERSA conference papers ersa11p489, European Regional Science Association.
    9. Ana María Díaz, 2013. "The Employment Advantages of Skilled Urban Municipalities in Colombia," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 31(70), pages 316-366, July.
    10. Julia von HANXLEDEN & Jan WEDEMEIER, 2019. "Development of metropolitan and non-metropolitan regions: growing disparities in the Europe of 28," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 10, pages 163-174, December.
    11. Juan Carlos Zapata Valencia & Santiago Gutiérrez Broncano & Mercedes Rubio Andres, 2013. "El rol del capital humano en la generación de valor: variables determinantes," Revista Ciencias Estratégicas, Universidad Pontificia Bolivariana, January.
    12. Egger, Hartmut & Felbermayr, Gabriel, 2009. "Endogenous skill formation and the source country effects of emigration," Munich Reprints in Economics 20521, University of Munich, Department of Economics.
    13. Jan Wedemeier, 2009. "The Impact of the Creative Sector on Growth in German Regions," European Planning Studies, Taylor & Francis Journals, vol. 18(4), pages 505-520, August.
    14. Charlie Karlsson & Börje Johansson & Roger R. Stough, 2012. "Introduction – Human Capital and Agglomeration," Chapters, in: Charlie Karlsson & Börje Johansson & Roger R. Stough (ed.), The Regional Economics of Knowledge and Talent, chapter 1, Edward Elgar Publishing.
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    More about this item

    Keywords

    externalities; local employment growth; human capital;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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