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Intrafirm human capital externalities and selection bias

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  • Jose Luis Raymond
  • Jose Luis Roig

Abstract

This article investigates the existence of intrafirm human capital externalities in the Spanish economy. In doing so, it focusses on two estimation issues. First, a semiparametric methodology is used to estimate externalities in a more flexible way that allows to affect all parameters in the equation. Second, two approaches to control for selection bias are designed for use in cross-section data. Our results show a higher externality effect on wages when using the semi parametric approach as compared to the standard estimation approach. Additionally, the estimations even when controlling for selection bias give evidence of externalities.

Suggested Citation

  • Jose Luis Raymond & Jose Luis Roig, 2011. "Intrafirm human capital externalities and selection bias," Applied Economics, Taylor & Francis Journals, vol. 43(29), pages 4527-4536.
    • Handle: RePEc:taf:applec:v:43:y:2011:i:29:p:4527-4536
    DOI: 10.1080/00036846.2010.491471
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    References listed on IDEAS

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    1. Antonio Ciccone & Giovanni Peri, 2006. "Identifying Human-Capital Externalities: Theory with Applications," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(2), pages 381-412.
    2. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    3. Kenneth R. Troske & Kimberly Bayard, 1999. "Examining the Employer-Size Wage Premium in the Manufacturing, Retail Trade, and Service Industries Using Employer-Employee Matched Data," American Economic Review, American Economic Association, vol. 89(2), pages 99-103, May.
    4. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November.
    5. Harminder Battu & Clive R. Belfield & Peter J. Sloane, 2003. "Human Capital Spillovers within the Workplace: Evidence for Great Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(5), pages 575-594, December.
    6. Daron Acemoglu, 1996. "A Microfoundation for Social Increasing Returns in Human Capital Accumulation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(3), pages 779-804.
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