Smart Cities: Quality of Life, Productivity, and the Growth Effects of Human Capital

Jesse Shapiro

No 11615, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: From 1940 to 1990, a 10 percent increase in a metropolitan area's concentration of college-educated residents was associated with a .8 percent increase in subsequent employment growth. Instrumental variables estimates support a causal relationship between college graduates and employment growth, but show no evidence of an effect of high school graduates. Using data on growth in wages, rents and house values, I calibrate a neoclassical city growth model and find that roughly 60 percent of the employment growth effect of college graduates is due to enhanced productivity growth, the rest being caused by growth in the quality of life. This finding contrasts with the common argument that human capital generates employment growth in urban areas solely through changes in productivity.

JEL-codes: J24 N92 R11 (search for similar items in EconPapers)
Date: 2005-09
New Economics Papers: this item is included in nep-geo and nep-ure
Note: LS
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Citations: View citations in EconPapers (58)

Published as Shapiro, Jesse M. "Smart Cities: Quality Of Life, Productivity, And The Growth Effects Of Human Capital," Review of Economics and Statistics, 2006, v88(2,May), 324-335.

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Journal Article: Smart Cities: Quality of Life, Productivity, and the Growth Effects of Human Capital (2006)
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