Local Human Capital Externalities and Wages at the Firm Level: The Case of Italian Manufacturing

Massimiliano Bratti and Roberto Leombruni ()
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Roberto Leombruni: University of Turin

No 4613, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We use a unique firm-level data set merging administrative information on average wages paid by firms by skill level (blue collars and white collars), Population Census information on the local stock of human capital available to firms and survey information on firm characteristics to investigate the existence and magnitude of local human capital externalities in Italian Manufacturing. The latter represents an interesting case study due to the prevalence of small family business and a technological lag with respect to the US, to which most evidence supporting local human capital spillovers refers. Our estimates show that in Italy, like in the US, firms located in geographical areas with a higher stock of human capital pay higher wages. This evidence is robust to many variants of the econometric specification and to addressing potential endogeneity issues using instrumental variables estimation and instruments based on the lagged expansion of the Italian higher education system and the lagged demographic structure.

Keywords: wages; firm; local human capital externalities; Italy; manufacturing (search for similar items in EconPapers)
JEL-codes: I20 J24 J31 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2009-12
New Economics Papers: this item is included in nep-hrm, nep-sbm and nep-ure
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Citations: View citations in EconPapers (4)

Published - revised version published in: Economics of Education Review, 2014, 41, 161-175

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