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External Eff ects of Education: Human Capital Spillovers in Regions and Firms

  • Thomas K. Bauer
  • Matthias Vorell


Using a matched employer-employee panel dataset for Germany, we analyze the external eff ects of education on individual wages. Following the basic framework of Moretti (2004), we allow spillover eff ects to occur both within a specifi c fi rm and a specifi c region rather than analyzing spillover eff ects only on a regional level. Controlling for individual- and fi rm-specifi c fi xed eff ects and using an instrumental variable strategy, our results confi rm the existence of positive but small external eff ects of human capital. Positive spillover eff ects within fi rms occur only for the group of high-skilled workers.

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Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0195.

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Length: 26 pages
Date of creation: Jul 2010
Date of revision:
Handle: RePEc:rwi:repape:0195
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