Human Capital and Growth of High- and Low-Skilled Jobs in Cities

Jens Suedekum

ERSA conference papers from European Regional Science Association

Abstract: In this paper I analyze the impact of initial human capital on subsequent city employment growth for the case of West Germany (1977-2002). I find robust evidence that skilled local areas have grown stronger than unskilled ones. But this observed positive relation need not indicate a localized human capital externality. A large initial share of highly skilled workers significantly reduces subsequent growth of high-skilled jobs. The observed positive impact on total employment growth is, thus, due to the fact that the positive effect on low- and medium-skilled jobs outweighs the negative effect on high-skilled employment. This evidence is in line with complementarities among skill groups as the major causal link between human capital and regional employment growth. It challenges theories of self-reinforcing spatial concentration of highly skilled workers in cities due to strong localized external effects.

Date: 2006-08
New Economics Papers: this item is included in nep-dev, nep-geo, nep-hrm and nep-lab
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:wiw:wiwrsa:ersa06p69

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