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

2004/05/01 by Enrico Moretti · 29 citations
Economics, Econometrics and Finance · #Economic Growth and Productivity #Regional Economics and Spatial Analysis #Fiscal Policy and Economic Growth

paper · doi:10.1257/0002828041464623

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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