Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/21469 
Year of Publication: 
2002
Series/Report no.: 
IZA Discussion Papers No. 488
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Identification of the strength of human capital externalities at the aggregate level is still not fully understood. The existing method may yield positive or negative externalities even if wages reflect marginal social products. We propose an approach that yields positive average human capital externalities if and only if the marginal social product of workers with aboveaverage human capital exceeds their wage. As an application, we estimate the strength of average-schooling externalities in US cities between 1970 and 1990.
Subjects: 
marginal social product of human capital
wages
human capital externalities
imperfect substitution
perfect substitution
cities
JEL: 
J3
R0
O4
O0
Document Type: 
Working Paper

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