The role of firm-level and regional human capital for the social returns to education - Evidence from German social security data

Nils Braakmann

No 126, Working Paper Series in Economics from University of Lüneburg, Institute of Economics

Abstract: This paper provides first evidence on the anatomy of human capital externalities arising from both firm-level and regional human capital. Using panel data from German social security records, both at an individual and aggregated at the plant and regional level, I estimate earnings functions incorporating measures of regional and firm-level human capital while controlling for various types of unobserved heterogeneity. The results suggest that the firm-level share of high-skilled workers generates positive, although small social returns to education for low-skilled and skilled workers but not for the high-skilled. This finding is in line with learning based theories of human capital externalities. Some estimates also suggest negative social returns for the regional shares of low-skilled workers. No such effects are found for the firm-level shares of low-skilled workers and the regional shares of high-skilled workers.

Keywords: Human capital externalities; social returns to education; error-component model (search for similar items in EconPapers)
JEL-codes: D62 J24 J31 R11 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2009-04
New Economics Papers: this item is included in nep-edu, nep-hrm, nep-lab and nep-ure
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Citations: View citations in EconPapers (5)

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