Regional returns to physical capital: are they conditioned by educational attainment?

Enrique Lopez-Bazo and Rosina Moreno ()

No 200718, IREA Working Papers from University of Barcelona, Research Institute of Applied Economics

Abstract: This paper provides novel empirical evidence of the indirect effect of educational attainment on regional economic growth, through its influence on the profitability of investment in physical capital. We test the hypothesis that the regional heterogeneity of the return to physical capital can be directly related to the existing heterogeneity in the educational attainment of workers. The results for the Spanish case support our hypothesis that the higher the educational attainment of workers the greater the returns on investment in physical capital. In fact, this effect seems to be sufficiently strong to have counterbalanced the traditional mechanism of decreasing returns to capital accumulation.

Keywords: returns to capital; human capital; productivity; cost system (search for similar items in EconPapers)
JEL-codes: J24 O11 O47 R11 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2007-12, Revised 2007-12
New Economics Papers: this item is included in nep-edu, nep-geo, nep-hrm and nep-ure
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Citations: View citations in EconPapers (34)

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Persistent link: https://EconPapers.repec.org/RePEc:ira:wpaper:200718

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