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  3. American Economic Review
  4. June 2004
  5. Workers' Education, Spillovers, and Productivity: Evidence from Plant-Level Production Functions

Workers' Education, Spillovers, and Productivity: Evidence from Plant-Level Production Functions

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Abstract

I assess the magnitude of human capital spillovers by estimating production functions using a unique firm-worker matched data set. Productivity of plants in cities that experience large increases in the share of college graduates rises more than the productivity of similar plants in cities that experience small increases in the share of college graduates. These productivity gains are offset by increased labor costs. Using three alternative measures of economic distance—input-output flows, technological specialization, and patent citations—I find that within a city, spillovers between industries that are economically close are larger than spillovers between industries that are economically distant.

Citation

Moretti, Enrico. 2004. "Workers' Education, Spillovers, and Productivity: Evidence from Plant-Level Production Functions." American Economic Review, 94 (3): 656-690. DOI: 10.1257/0002828041464623

JEL Classification

  • D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • L60 Industry Studies: Manufacturing: General
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics