Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/107318 
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper No. 5183
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
If being around smart people makes us smarter and more productive, what can regions do to attract smart people? This paper considers endogenous cultural amenities as a location factor for high-skilled workers. To overcome selection in the provision of cultural amenities, we exploit the variation in contemporaneous cultural amenities stemming from baroque opera houses in Germany that emerged during a time when the decision for an opera house was mainly determined by the ruler's preferences and rarely by funding constraints. To assess spillovers from high-skilled workers attracted by cultural amenities, we use a 1-percent sample drawn from the population of all West German workers under social security during the period 1975-2010. This panel of individual observations allows us to compare wages of similar individuals who work in locations with different levels of high-skilled workers who are attracted by cultural amenities. To account for non-random selection of workers among cities, we use individual-location fixed effects. Our results show that cultural amenities are an important factor in the location decision of high-skilled workers. The positive effect of the local share of high-skilled workers on unskilled, skilled and high-skilled wages indicates strong and productive spillovers.
Subjects: 
cultural amenities
social returns
higher education
JEL: 
I20
J30
Z10
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.