• KDI Journal of Economic Policy
• /
• v.38 no.4
• /
• pp.77-94
• /
• 2016

This paper examines the empirical magnitude of local human capital spillovers in Korea during the 1980s and mid-1990s. Local human capital spillovers exists if plants in regions with a higher level of human capital can produce more given their own amount of input (Moretti 2004c). In particular, this paper explores an educational reform in South Korea which exogenously induced a large amount of variation in regional human capital levels. Using annually collected plant level data, I explore the effect of changes in the regional human capital levels induced by this reform on plant productivity in Korea. My results suggest that this effect is limited. I find a positive correlation between a regional level of human capital and plant productivity. However, after further addressing endogeneity using an instrumental variable, the effect of the overall regional human capital level on productivity decreases and becomes statistically insignificant.

• Journal of the Economic Geographical Society of Korea
• /
• v.12 no.4
• /
• pp.627-644
• /
• 2009

In the knowledge-based economy highlighting the importance of human capital, there has been a growing interest in human capital externalities as a fundamental engine of growth and development of a region. The purpose of this study is to analyze human capital externalities using 3-level hierarchical linear model(3-HLM), decomposing determinants of wages into three levels involving workers(level-1) nested within firms(level-2) nested within regions(level-3). This study separately estimates the effect of the average education level on the wages by three different schooling groups on the assumption that the intensity of knowledge spillovers varies with each group's schooling level. The main results are as follows; First, the coefficient of the average education level of a region shows 0.044, indicating that one-year increase in the average level of schooling could increase average individual earnings by 4.4%. Secondly, the external effects of human capital on three different schooling groups are considerably different, raising less than high school graduates' wages by 3.0%, college graduates' wages by 4.7%, and graduate schools' wages by 11.8%, respectively. Thirdly, well educated workers are much more sensitive to the variation of the regional education level than less educated ones when we apply the shares of each schooling group as alternative measures for the average level of education. Such findings of this study draw an implication that local governments could speed up regional economic growth in the knowledge-based economy by not only raising total human capital stock in a region but building the close networks that promote productivity-enhancing human capital external effects.