Productivity and the density of human capital

Jaison Abel, Ishita Dey and Todd Gabe

No 2010/30, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: We estimate a model of urban productivity in which the agglomeration effect of density is enhanced by a metropolitan area’s stock of human capital. Estimation accounts for potential biases due to the endogeneity of density and industrial composition effects. Using new information on output per worker for U.S. metropolitan areas along with a measure of density that accounts for the spatial distribution of population, we find that a doubling of density increases productivity by 2 to 4 percent. Consistent with theories of learning and knowledge spillovers in cities, we demonstrate that the elasticity of average labor productivity with respect to density increases with human capital. Metropolitan areas with a human capital stock one standard deviation below the mean realize no productivity gain, while doubling density in metropolitan areas with a human capital stock one standard deviation above the mean yields productivity benefits that are about twice the average.

Keywords: Agglomeration; productivity; density; knowledge spillovers (search for similar items in EconPapers)
JEL-codes: J24 O40 R12 R30 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: PRODUCTIVITY AND THE DENSITY OF HUMAN CAPITAL (2012)
Working Paper: Productivity and the density of human capital (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ieb:wpaper:doc2010-30

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