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Abstract
Rodríguez-Pose A. and Tselios V. Individual earnings and educational externalities in the European Union, Regional Studies. This paper examines whether differences in educational externalities affect individual earnings across regions in the European Union. Using microeconomic data from the European Community Household Panel, it resorts to spatial economic analysis in order to determine to what extent differences in individual earnings are the result of (1) the educational attainment of the individual, (2) the educational attainment of the other members of the household in which he/she lives, (3) the educational endowment of the region where the individual lives, or (4) the educational endowment of the neighbouring regions. The results highlight that, in addition to the expected positive returns of personal educational attainment, place-based regional and supra-regional educational externalities generate significant pecuniary benefits for workers. These findings are robust to the inclusion of different individual, household, and regional control variables.
Rodríguez-Pose A. et Tselios V. Les gains individuels et les effets externes de l'éducation dans l'Union européenne, Regional Studies. Cet article cherche à examiner si, oui ou non, les différents effets externes de l'éducation influent sur les gains individuels à travers les régions de l'Union européenne. Employant des données microéconomiques provenant du European Community Household Panel (échantillon permanent des foyers de l'Union européenne), on a recours à une analyse économique spatiale afin de déterminer jusqu'à quel point les écarts des revenus individuels s'expliquent par (1) la réussite scolaire de l'individu, (2) par la réussite scolaire des autres membres du foyer, (3) par la dotation en équipement scolaire de la région où habite l'individu, ou bien (4) par la dotation en équipement scolaire des régions voisines. En plus des rendements positifs prévus de la réussite scolaire de l'individu, les résultats soulignent les avantages pécuniaires non-négligeables pour les travailleurs des effets externes régionaux et suprarégionaux de l'éducation qui sont basés sur l'endroit. Ces résultats s'avèrent robustes quand on inclut des variables de contrôle différentes pour l'individu, le foyer et la région.
Gains individuels Réussite scolaire Effets externes Foyers Régions Europe
Rodríguez-Pose A. und Tselios V. Individuelles Einkommen und Bildungsexternalitäten in der Europäischen Union, Regional Studies. In diesem Beitrag wird untersucht, ob sich die Unterschiede bei den Bildungsexternalitäten auf das individuelle Einkommen in verschiedenen Regionen der Europäischen Union auswirken. Ausgehend von mikroökonomischen Daten des Haushaltspanels der Europäischen Gemeinschaft wird eine räumliche Wirtschaftsanalyse durchgeführt, um festzustellen, in welchem Umfang die Unterschiede bei den individuellen Einkommen auf (1) den Bildungsgrad der Person, (2) den Bildungsgrad der anderen Mitglieder des Haushalts dieser Person, (3) den Bildungsstand der Region, in der die Person lebt, oder (4) den Bildungsstand der angrenzenden Regionen zurückzuführen sind. Aus den Ergebnissen geht hervor, dass zusätzlich zu den erwarteten positiven Ergebnissen des persönlichen Bildungsgrades auch die ortsgebundenen regionalen und supraregionalen Bildungsexternalitäten für die Arbeitnehmer mit signifikanten finanziellen Vorteilen verbunden sind. Diese Ergebnisse bleiben auch bei Berücksichtigung verschiedener individueller, Haushalts- und regionaler Kontrollvariablen robust.
Individuelles Einkommen Bildungsgrad Externalitäten Haushalte Regionen Europa
Rodríguez-Pose A. y Tselios V. Ingresos individuales y externalidades educativas en la Unión Europea, Regional Studies. En este artículo se examina si las diferencias de las externalidades educativas entre las regiones de la UE influyen sobre los ingresos económicos de los individuos. Mediante un análisis económico de carácter espacial y utilizando datos microeconómicos provenientes de la Encuesta Europea de Familias se intenta determinar si las diferencias de los ingresos entre individuos en distintas regiones de la UE son el resultado de (1) el nivel educativo de cada individuo, (2) el nivel educativo de los demás miembros de la unidad familiar, (3) el nivel educativo de la región en la que se vive o (4) el nivel educativo de las áreas vecinas. Los resultados demuestran que, además de los rendimientos positivos ligados al nivel personal de formación, las externalidades geográficas de carácter regional y supra-regional generan importantes beneficios pecuniarios para los trabajadores. Estos resultados son sólidos para la inclusión de distintas variables de control de tipo individual, familiar y regional.
Ingresos individuales Nivel de formación Externalidades Unidades familiares Regiones Europa
Acknowledgements
The authors are grateful to three anonymous referees and the Editors for their comments to earlier versions of this paper. They would also like to acknowledge the generous financial support of a Leverhulme Trust Major Research Fellowship and of the PROCIUDAD-CM programme. The paper is also part of the research programme of the independent UK Spatial Economics Research Centre (SERC) funded by the Economic and Social Research Council (ESRC), the Department for Business, Skills and Innovation (BSI), Communities and Local Government, and the Welsh Assembly Government. The views expressed herein are those of the authors and do not necessarily represent the views of the funders.
Notes
This contrasts with Moretti's (2004) work which finds evidence of a connection between the share of college graduates in US cities and wages between 1980 and 1999.
The social returns to education are measured by the sum of the internal and the external returns to education, as human capital investment decisions should be based on the social returns to education (Liu, Citation2007).
The countries included in the study are Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Portugal, Spain, The Netherlands, and the United Kingdom. For the pooled regional distribution of the observations, see Appendix A.
More specifically, since all educational variables are expressed as deviations from country means, the fixed-effect coefficient β 1 may not represent the internal (private) returns to education, because variation in educirs ,t expresses variation in two components: variation in country educational endowment and variation in individual educational attainment. As the level of education of an adult worker is generally constant over time, variation in the latter component is likely to be higher than in the former.
This is likely to be a ‘strong’ assumption in the model because it assumes that the education variables are exogenous. This may bias the parameter estimates upward. The statistical way out of this potential ‘endogeneity trap’ would require instrumenting educational attainment variables. In a two-level Mincerian wage regression, Acemoglu and Angrist Citation(2001) suggest instruments for aggregate schooling, as well as for individual schooling. In the present four-level Mincerian wage regression, the instrumental variable method would imply instruments for (1) individual educational attainment, (2) educational attainment of the other members, (3) regional educational endowment, and (4) educational endowment of the neighbouring regions, making the identification of ‘good’ instruments problematic and the analysis virtually unviable. In any case, endogeneity is fundamentally a theoretical problem and it is believed that, given that the educational attainment of the individual tends to be relatively stable, the direction of causality tends to run from education to wages and not vice versa.
Using the interaction terms of household education externalities with gender dummies, the results show that these benefits are similar for both men and women. These results are reproduced when resorting to interaction terms of household education externalities with children dummies (couples without children and couples with children). The same benefits accrue to both types of couples.
The k-nearest neighbours weights matrix is used and the results are reported for k = 5. The results for k = 7 and 9 are very similar and are omitted here for the sake of brevity. They are available from the authors upon request.
However, according to some scholars (Acemoglu and Angrist, Citation2001; Moretti, Citation2004; Ciccone and Peri, Citation2006), a positive and significant coefficient on regional educational endowment may not represent evidence of ‘genuine’ spillovers. As Ciccone and Peri Citation(2006) underline, such a result may just be a consequence of ‘composition effects’ which arise when skilled and unskilled workers are imperfect substitutes (in this case, a large relative number of skilled workers tends to raise average productivity and average wages). There is thus the possibility that the coefficient on regional educational endowment is positive and significant even when human capital externalities are zero. This problem is addressed by following Moretti's (2004) approach. This method implies splitting the sample into educated and less-educated workers and testing the augmented Mincerian wage equation on both groups. Since regional human capital still has a positive effect even on skilled wages, this can be taken as evidence of regional spillovers. Regressions 5 and 6 have also been tested controlling for regional population and the results are robust. The above results are available from the authors upon request.
‘Agriculture’ is the share of added value of agriculture, hunting, forestry, and fishing in total added value; ‘industry’ is the share of added value of mining and quarrying, manufacturing, electricity, gas and water supply, and construction in total added value; and ‘services’ is the share of added value of services (excluding extra-territorial organizations and bodies) in total added value.
