Workers' Education, Spillovers, and Productivity: Evidence from Plant-Level Production Functions

2004/05/01 by Enrico Moretti · 1,097 citations
Economics, Econometrics and Finance · #Economic Growth and Productivity #Economic growth #Economics #Fiscal Policy and Economic Growth #Human capital #Labour economics #Microeconomics #Offset (computer science) #Production (economics) #Productivity #Regional Economics and Spatial Analysis

paper · open access · doi:10.1257/0002828041464623

published in American Economic Review 94(3), 656-690 (American Economic Association)

openalex publication_date 2004/05/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/26

Abstract

I assess the magnitude of human capital spillovers by estimating production functions using a unique firm-worker matched data set. Productivity of plants in cities that experience large increases in the share of college graduates rises more than the productivity of similar plants in cities that experience small increases in the share of college graduates. These productivity gains are offset by increased labor costs. Using three alternative measures of economic distance—input-output flows, technological specialization, and patent citations—I find that within a city, spillovers between industries that are economically close are larger than spillovers between industries that are economically distant.

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