Bohemians, Human Capital, and Regional Economic Growth

33 Pages Posted: 22 Jul 2009

See all articles by Oliver Falck

Oliver Falck

CESifo (Center for Economic Studies and Ifo Institute) - Department Human Capital and Innovation

Michael Fritsch

University of Jena - School of Economics and Business Administration

Stephan Heblich

University of Stirling - Department of Economics

Date Written: July 2009

Abstract

An emerging literature on the geography of bohemians argues that a region’s lifestyle and cultural amenities explain, at least partly, the unequal distribution of highly qualified people across space, which in turn, explains geographic disparities in economic growth. However, to date, there has been little or no empirical attempt to identify a causal relation. To identify the causal impact of bohemians on economic growth, we apply an instrumental variable approach using as an exogenous instrument the geographic distribution of bohemians prior to the Industrial Revolution in Germany. This distribution was primary the result of competition for prestige between courts and not of economic prosperity. Accordingly, the instrument is independent of today’s regional economic development. Focusing on the concentration of highly skilled people today that is explained by the proximity to exogenous concentrations of bohemians, the observed local average treatment effect supports the hypothesis of a positive impact of bohemians on regional economic development.

Keywords: regional growth, human capital, bohemians, instrumental variables

JEL Classification: R11, J24, C31

Suggested Citation

Falck, Oliver and Fritsch, Michael and Heblich, Stephan, Bohemians, Human Capital, and Regional Economic Growth (July 2009). CESifo Working Paper Series No. 2715. Available at SSRN: https://ssrn.com/abstract=1437495

Oliver Falck (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Department Human Capital and Innovation ( email )

Poschingerstr. 5
Munich, 81679
Germany

Michael Fritsch

University of Jena - School of Economics and Business Administration ( email )

Carl-Zeiss-Str. 3
D-07743 Jena
Germany

Stephan Heblich

University of Stirling - Department of Economics ( email )

Stirling, Scotland FK9 4LA
United Kingdom

HOME PAGE: http://www.management.stir.ac.uk/people/economics/academic-staff/dr-stephan-heblich

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