External Effects of Education: Human Capital Spillovers in Regions and Firms

Thomas Bauer () and Matthias Vorell ()

No 195, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Using a matched employer-employee panel dataset for Germany, we analyze the external effects of education on individual wages. Following the basic framework of Moretti (2004), we allow spillover effects to occur both within a specific firm and a specific region rather than analyzing spillover effects only on a regional level. Controlling for individual- and firm-specific fixed effects and using an instrumental variable strategy, our results confirm the existence of positive but small external effects of human capital. Positive spillover effects within firms occur only for the group of high-skilled workers.

Keywords: external effects; human capital; employer-employee matched data (search for similar items in EconPapers)
JEL-codes: C23 D62 J31 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:195

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