Myths, Visions and Realities
Edited by Marina van Geenhuizen and Peter Nijkamp
Chapter 9: A Map of Human Capital in European Cities
Andrea Caragliu, Chiara Del Bo and Peter Nijkamp INTRODUCTION But lo! Men have become the tools of their tools. (H.D. Thoreau, Walden) Educated men are more productive. The evidence accumulated to back this statement up is impressive, and ranges from historic records (the Aztec Empire, Japan during the Meiji era, Scotland and the 1616 School Establishment Act) to those of the late nineteenth and twentieth centuries. How much does an additional year of schooling pay off in terms of increased income? This debated question can be tackled from different perspectives; the evidence is, however, quite clear and suggests that private returns from education may be around 8–10 per cent of the resources invested (in terms of both expenditure for obtaining education, as well as foregone earnings), and even larger when considering societies as a whole. However, returns from schooling are not stable over time and space. Support for this statement can be found by inspecting Figure 9.1, and is obtained as follows. A human capital augmented production function is estimated for EU countries for which the World Bank’s World Development Indicators (henceforth, WDI) and Barro-Lee years of schooling data (Barro, 2001; Barro and Lee, 2001) are simultaneously available, over the period 1980–2000, at five-year intervals.1 The empirical results tell an interesting story. Although the estimated coefficients must be treated with caution due to the imperfect measure of schooling and the difficult comparability of data across different countries, this graph shows interesting patterns. First, from all three measures, it...
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