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Local human capital and its impact on local employment chances in Britain

Kaplanis, Ioannis (2010) Local human capital and its impact on local employment chances in Britain. SERC Discussion Papers, SERCDP0040. Spatial Economics Research Centre (SERC), London School of Economics and Political Science, London, UK.

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Abstract

This paper examines how high human capital in a locality is associated with the employment outcomes of individuals. A probit model is used to examine how the employment probability of otherwise similar working age males is associated with changes in the share of degree holders in the local area. Different econometric specifications are employed in order to shed light on the positive effect found and its possible causes. The paper discusses three main accounts, referring to the consumption demand, productivity spillovers and production complementarities. For Britain, it is found that the share of high skill residents in a locality has a strong positive impact on the local employment chances of men with no qualifications. The effect on the local employment chances of the other educational groups is either insignificant or significant negative. These results are consistent with the consumer demand hypothesis that the presence of high educated, high income individuals in a locality boosts the demand for local low skill services. On the other hand, when the share of skilled workers is used, the results hint on possible simultaneous effect of production complementarities and productivity spillovers. However, the analysis points to the existing limitations of successfully isolating the consumption demand and the production function mechanisms and calls for further research.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.spatialeconomics.ac.uk/SERC/publication...
Additional Information: © 2010 Ioannis Kaplanis
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Sets: Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: SERCDP0040
Date Deposited: 24 Mar 2011 11:13
URL: http://eprints.lse.ac.uk/33503/

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