Local Human Capital and Productivity: An Analysis for the Spanish Regions

Abstract

Sanromá E. and Ramos R. (2007) Local human capital and productivity: an analysis for the Spanish regions, Regional Studies 41, 349–359. This paper examines the relationship between the stock of human capital and productivity in the Spanish regions (NUTS III), and assesses whether the transmission channel involves external economies. The empirical evidence points to a positive relationship between the two variables, although it cannot be explained in terms of the impact of exogenous local human capital external economies, but rather in terms of other demand factors.

Sanromá E. et Ramos R. (2007) Le capital humain et la productivité locales: une analyse des régions d'Espagne, Regional Studies 41, 349–359. Cet article cherche à examiner le rapport entre le stock de capital humain et la productivité dans les régions d'Espagne (NUTS III) et à évaluer si, oui ou non, la chaîne de transmission implique des économies externes. Les preuves empiriques indiquent un rapport étroit entre les deux variables, bien que l'on ne puisse pas l'expliquer en termes de l'impact des économies externes du capital humain local exogen, mais plutôt en termes d'autres facteurs de demande.

Economies externes Salaires Capital humain Marchés du travail régionaux

Sanromá E. und Ramos R. (2007) Lokales Humankapital und Produktivität: eine Analyse für die spanischen Regionen, Regional Studies 41, 349–359. In diesem Beitrag untersuchen wir das Verhältnis zwischen dem Angebot an Humankapital und der Produktivität in den spanischen Regionen (NUTS III) und untersuchen die Frage, ob an diesem Übertragungskanal externe Ökonomien beteiligt sind. Die empirischen Belege weisen auf eine positive Beziehung zwischen den beiden Variablen hin, die sich allerdings nicht durch die Auswirkung externer Ökonomien mit exogenem lokalem Humankapital, sondern durch andere Nachfragefaktoren erklären lässt.

Externe Ökonomien Löhne Humankapital Regionale Arbeitsmärkte

Sanromá E. y Ramos R. (2007) Capital humano local y productividad: un análisis para las provincias españolas. Regional Studies 41, 349–359. Este artículo analiza la relación entre el nivel de capital humano de las provincias españolas (NUTS III) y su productividad y examina si el canal de transmisión son las economías externas. La evidencia empírica detecta una relación positiva entre ambas variables, si bien dicha relación no puede explicarse por el impacto de las economías externas generadas exógenamente por el capital humano, sino que debe atribuirse a otros factores de demanda.

Economías externas Salarios Capital humano Mercados laborales regionales

Keywords:

• External economies
• Wages
• Human capital
• Regional labour markets

Acknowledgements

The authors wish to thank two anonymous referees for their suggestions. Esteban Sanromá gratefully acknowledges the support received from CICYT SEJ2004-05860/ECON; Raúl Ramos gratefully acknowledges the support from CICYT SEJ2005-04348/ECON. The usual disclaimers apply.

Notes

1. Although Smith (1776, bk I, ch. 10-1; Cannan, 1908) highlighted the positive effects of education on productivity, Marshall was the first to argue that this effect could extend to other workers in the same territory. In his study of the ‘industrial district’, Marshall (1890) describes technological spillovers resulting from the interaction between workers in the same district, thereby promoting learning and, in turn, increasing productivity.

2. This was the only information available in the database about changes in workers' place of residence.

3. The source for provincial employment data is: Mas et al. (1995).

4. The private physical capital stock data for 1991 (excluding agriculture and fishery) in each region were obtained from Mas et al. (2003).

5. Regional non-agricultural unemployment rates were calculated as the average of the quarterly statistics for the last three quarters of 1990 and for the first quarter of 1991 in the Encuesta de Población Activa, conducted by the Instituto Nacional de Estadística.

6. A similar reasoning could be made for employment: if territories with high productivity (and wages) attract workers, the causality will be in the opposite direction to that considered here. However, it was found that the employment variable was not statistically significant at the usual levels.

7. From a theoretical point of view, an income effect operating in the opposite direction may also be expected: when unemployment is high, family income falls making college unaffordable, while teenage children might drop out of school to help support the family. However, empirical evidence does not support this argument (Arkes, 2003; Dalmazzo and de Blasio, 2005).

8. All calculations in this section were carried out using STATA's ivreg2 routine.

9. Detailed results are available from the authors on request.