Estimating human capital externalities: The case of the Spanish provinces, 1995-2010

Authors: Manuel Hidalgo and Walter García-Fontes

Revista de Economia Aplicada, Vol. 24, No 71, 5-38, September, 2016

We estimate the strength of schooling externalities for Spanish provinces over the 1995-2010 period. Our empirical work employs both main approaches available in the literature, the Constant Composition approach and the Mincerian approach. Using data from the Continuous Sample of Working Records and analyzing empirically the effect of human capital stock changes on wages at the provincial level, we find that both methodologies yield significant externalities.