Local Geographic Spillovers between University Research and High Technology Innovations

Based on recent theoretical developments I argue that the average level of human capital is a local public good. Cities with higher average levels of human capital should therefore have higher wages and higher land rents. After conditioning on the characteristics of individual workers and dwellings, this prediction is supported by data for Standard Metropolitan Statistical Areas (SMSAs) in the United States, where the SMSA average levels of formal education and work experience are used as proxies for the average level of human capital. I evaluate the alternative explanations of omitted SMSA variables and self-selection. I conclude by computing an estimate of the effect of an additional year of average education on total factor productivity.

Productivity Gains From Geographic Concentration of human Capital: Evidence From the Cities

Economists have speculated for at least a century that the social return to education may exceed the private return. In this paper, I estimate spillovers from college education by comparing wages for otherwise similar individuals who work in cities with different shares of college graduates in the labor force. OLS estimates show a large positive relationship between the share of college graduates in a city and individual wages, over and above the private return to education. A key issue in this comparison is the presence of unobservable individual characteristics, such as ability, that may raise wages and be correlated with college share. I use a confidential version of the National Longitudinal Survey of Youth (NLSY) to estimate a model of non-random selection of workers among cities. By observing the same individual over time, I can control for differences in unobserved ability across individuals and differences in the return to skills across cities. I then investigate the hypothesis that the correlation between college share and wages is due to unobservable city-specific shocks that may raise wages and attract more highly educated workers to different cities. To control for this source of potential bias, I turn to Census data and use two instrumental variables: the lagged city demographic structure and the presence of a land--grant college. The results from Census data are remarkably consistent with those based on the NLSY sample. A percentage point increase in the supply of college graduates raises high school drop-outs' wages by 1.9%, high school graduates' wages by 1.6%, and college graduates wages by 0.4%. The effect is larger for less educated groups, as predicted by a conventional demand and supply model. But even for college graduates, an increase in the supply of college graduates increases wages, as predicted by a model that includes conventional demand and supply factors as well as spillovers.

Estimating the Social Return to Higher Education: Evidence From Longitudinal and Repeated Cross-Sectional Data

The Home Mortgage Disclosure Act was enacted to monitor minority and low-income access to the mortgage market. The data collected for this purpose show that minorities are more than twice as likely to be denied a mortgage as whites. Yet variables correlated with both race and creditworthiness were omitted from these data, making any conclusion about race's role in mortgage lending impossible. The Federal Reserve Bank of Boston collected additional variables important to the mortgage lending decision and found that race continued to play an important, though significantly diminished, role in the decision to grant a mortgage. Copyright 1996 by American Economic Association.

Mortgage Lending in Boston: Interpreting HMDA Data

https://eml.berkeley.edu/~moretti/socret.pdf

Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data

Population growth in U.S. counties, 1840–1990

This paper uses a stochastic frontier production-function model to measure and compare productivity efficiency in the manufacturing sector of states in the United States over the period 1959–1972. Based on this model we find considerable variations in productive efficiency across states. A large portion of the variation is found to be related to regional differences in labor-force characteristics, levels of urbanization and industrial structure. We also examine the relationship between productive efficiency and the subsequent growth of manufacturing and find some evidence of a weak relationship between efficiency and the growth of employment.

Patterns and determinants of productive efficiency in state manufacturing

This study focuses on the relative importance of amenity and productivity differences in determining wage differentials across urban areas. The approach developed takes advantage of the connection between land and labor market clearing conditions required for locational equilibrium of households and firms. Data on recent movers are used to estimate equilibrium wages and rents for a sample of metropolitan areas. This information is then used to identify amenity and productivity components of wages for each city in the sample. Using national estimates of the relative share of land in consumption and production, differences in productivity and amenities are found to be roughly equal sources of wage variation across the sample.

Identifying productivity and amenity effects in interurban wage differentials

/pdf/identifying-productivity-and-amenity-effects-in-interurban-4l2dzbic7h.pdf

Identifying Productivity and Amenity Effects In Interurban Wage Differentials

This paper investigates the determinants of productivity growth in the manufacturing sector of states over the period 1959-1973. Special emphasis is placed on isolating the effects of a state's urbanization characteristics on productivity growth. Urbanization characteristics considered include the spatial arrangement of cities along with the standard measures of urbanization. The results indicate that while both scale economies and technical change are related to urbanization characteristics the effects tend to be offsetting; no relationship is found between urbanization and overall productivity growth as measured by total factor productivity growth.

Patricia E. Beeson

Papers

Population growth in U.S. counties, 1840–1990

Patterns and determinants of productive efficiency in state manufacturing

Identifying productivity and amenity effects in interurban wage differentials

Identifying Productivity and Amenity Effects In Interurban Wage Differentials

Total factor productivity growth and agglomeration economies in manufacturing, 1959-73*