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Wage effects from changes in local human capital in Britain

  • Kaplanis, Ioannis

This paper examines the impact of local human capital on individuals’ wages through external effects. Employing wage regressions, it is found that changes in individuals’ wages are positively associated with changes in the shares of high-paid occupation workers in the British travel-to-work-areas for the late 1990s. I examine this positive association for different occupational groups (defined by pay) in order to disentangle between production function and consumer demand driven theoretical explanations. The wage effect is found to be stronger and significant for the bottom-paid occupational quintile compared to the middle-paid ones, and using also sectoral controls the paper argues to provide evidence for the existence of consumer demand effects.

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File URL: http://hdl.handle.net/2072/179614
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Paper provided by Universitat Rovira i Virgili, Department of Economics in its series Working Papers with number 2072/179614.

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Date of creation: 2011
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Handle: RePEc:urv:wpaper:2072/179614
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  1. Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Ian Richard Gordon & Ioannis Kaplanis, 2014. "Accounting for Big-City Growth in Low-Paid Occupations: Immigration and/or Service-Class Consumption," Economic Geography, Clark University, vol. 90(1), pages 67-90, 01.
  3. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
  4. Ioannis Kaplanis, 2010. "Local human capital and its impact on local employment chances in Britain," LSE Research Online Documents on Economics 33503, London School of Economics and Political Science, LSE Library.
  5. Ioannis Kaplanis, 2006. "The Geography of Employment Polarisation in Britain," ERSA conference papers ersa06p597, European Regional Science Association.
  6. Tony Champion & Mike Coombes, 2007. "Using the 2001 census to study human capital movements affecting Britain's larger cities: insights and issues," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 170(2), pages 447-467.
  7. Ian R. Gordon & Philip McCann, 2005. "Innovation, agglomeration, and regional development," Journal of Economic Geography, Oxford University Press, vol. 5(5), pages 523-543, October.
  8. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-42, April.
  9. Stephen Gibbons & Anne Green & Paul Gregg & Stephen Machin, 2005. "Is Britain Pulling Apart? Area Disparities in Employment, Education and Crime," The Centre for Market and Public Organisation 05/120, Department of Economics, University of Bristol, UK.
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