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The Phantom of the Opera: Cultural Amenities, Human Capital, and Regional Economic Growth

Author

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  • Falck, Oliver

    (Ifo Institute for Economic Research)

  • Fritsch, Michael

    (University of Jena)

  • Heblich, Stephan

    (University of Toronto)

Abstract

We analyze the extent to which endogenous cultural amenities affect the spatial equilibrium share of high-human-capital employees. To overcome endogeneity, we draw on a quasi-natural experiment in German history and exploit the exogenous spatial distribution of baroque opera houses built as a part of rulers' competition for prestigious cultural amenities. Robustness tests confirm our strategy and strengthen the finding that proximity to a baroque opera house significantly affects the spatial equilibrium share of high-human-capital employees. Then, a cross-region growth regression shows that these employees induce local knowledge spillovers and shift a location to a higher growth path.

Suggested Citation

  • Falck, Oliver & Fritsch, Michael & Heblich, Stephan, 2010. "The Phantom of the Opera: Cultural Amenities, Human Capital, and Regional Economic Growth," IZA Discussion Papers 5065, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp5065
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    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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