Paper #611

Títol:

Indentifying human capital externalities: Theory with an application to US cities

Autors:

Antonio Ciccone i Giovanni Peri

Data:

Març 2002

Resum:

The identification of aggregate human capital externalities is still not fully understood. The existing (Mincerian) approach confounds positive externalities with wage changes due to a downward sloping demand curve for human capital. As a result, it yields positive externalities even when wages equal marginal social products. We propose an approach that identifies human capital externalities whether or not aggregate demand for human capital slopes downward. Another advantage of our approach is that it does not require estimates of the individual return to human capital. Applications to US cities and states between 1970 and 1990 yield no evidence of significant average -schooling externalities.

Paraules clau:

Human capital, Externalities, wages, downward sloping labor, demand, imperfect substitutability

Codis JEL:

O0, O4, R0, J3

Àrea de Recerca:

Macroeconomia i Economia Internacional

Publicat a:

The Review of Economic Studies, Vol. 73, No. 2, pp. 381-412, April 2006

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