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Human capital and regional development

  • Nicola Gennaioli
  • Rafael Laporta
  • Florencio López-de-Silanes
  • Andrei Schleifer

We investigate the determinants of regional development using a newly constructed database of 1569 sub-national regions from 110 countries covering 74 percent of the world’s surface and 97 percent of its GDP. We combine the cross-regional analysis of geographic, institutional, cultural, and human capital determinants of regional development with an examination of productivity in several thousand establishments located in these regions. To organize the discussion, we present a new model of regional development that introduces into a standard migration framework elements of both the Lucas (1978) model of the allocation of talent between entrepreneurship and work, and the Lucas (1988) model of human capital externalities. The evidence points to the paramount importance of human capital in accounting for regional differences in development, but also suggests from model estimation and calibration that entrepreneurial inputs and possibly human capital externalities help understand the data.

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File URL: http://www.econ.upf.edu/docs/papers/downloads/1286.pdf
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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1286.

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Date of creation: Sep 2011
Date of revision: Jul 2012
Handle: RePEc:upf:upfgen:1286
Contact details of provider: Web page: http://www.econ.upf.edu/

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