Human Capital and Regional Development *

Abstract

We investigate the determinants of regional development using a newly constructed database of 1569 sub-national regions from 110 countries covering 74 percent of the world's surface and 97 percent of its GDP. We combine the cross-regional analysis of geographic, institutional, cultural, and human capital determinants of regional development with an examination of productivity in several thousand establishments located in these regions. To organize the discussion, we present a new model of regional development that introduces into a standard migration framework elements of both the Lucas (1978) model of the allocation of talent between entrepreneurship and work, and the Lucas (1988) model of human capital externalities. The evidence points to the paramount importance of human capital in accounting for regional differences in development, but also suggests from model estimation and calibration that entrepreneurial inputs and possibly human capital externalities help understand the data.

Regional economic development in Europe: the role of total factor productivity

“…3. This decomposition, for example, has been instrumental for the analysis of the information and communication technology (ICT) revolution (Jorgenson & Stiroh, 2000;Oliner & Sichel, 2000), the rapid growth of East Asian economies (Hsieh, 2002;Young, 1995), and the productivity gap between Europe and the United States (van Ark, O'Mahony, & Timmer, 2008 Acemoglu and Dell (2010) and Gennaioli et al (2013), this should not have a major impact on the analysis. 8.…”

“…As generalized trust has been shown to have a positive association with regional economic development (Beugelsdijk & van Schaik, 2005;Tabellini, 2010), our analysis employs the level of trust in each region, measured by data from the European Values Study (EVS). 14 In addition to social capital, the analysis also considers the degree of ethnic heterogeneity by including an ethnic fractionalization index, as in Gennaioli et al (2013). This is motivated by the fact that higher diversity is generally associated with lower levels of economic development (Alesina & Zhuravskaya, 2011;Beugelsdijk, Klasing & Milionis, 2017 the legacy of history on current TFP differences, we consider each region's historical urban density in 1800 based on data from Bairoch, Batou, and Chevre (1988).…”

“…Using data from 2005 for a large sample of subnational regions across the world, Gennaioli, La Porta, Lopez-de Silanes, and Shleifer (2013) show that the ratio of income per worker between a country's richest and poorest region is on average equal to 4.4. The same data indicate also sizeable income differences within European Union (EU) countries, which are relatively small and homogeneous, with the corresponding ratio being approximately equal to 2.2.…”

Competitive Ability of Russian Economy on Macroeconomic Level

“…• Education (number of people with the higher, incomplete higher, secondary general professional education and also people without education) (Gennaioli et al,2013;Ghosh & Mastromarco, 2013);…”

National innovation system capabilities among leader and follower countries: widening gaps or global convergence?

“…One such dimension with almost a universal agreement on its positive impact for innovation is that of human capital (and education system). At the national level human capital is commonly proxied through various indicators depicting the official educational attainment levels of its population and other schooling related measures such as educational expenditures and teacher-pupil ratios (Gennaioli et al 2013;Teixeira and Fortuna 2010). As stated above, empirical works have indeed corroborated the positive impacts of human capital (or educational attainment) on nations' innovative capabilities and performance (Makkonen and Inkinen 2013;Teles and Joiozo 2011).…”