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Historical trades, skills and agglomeration economies

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  • Ehrl, Philipp
  • Monteiro Monasterio, Leonardo

Abstract

We exploit differences in the spatial distribution of industrial and liberal occupations in the years 1872 and 1920 to instrument for today's concentration of interpersonal and analytical skills in Brazil. The data suggest that the local supply of knowledge and manufacturing provided by these historical trades favored a growth path that has shaped the occupational structure until the present day, whereby the existence of a large local consumer market was a necessary condition for this development. By means of these instruments, we present causal evidence that the regional concentration of interpersonal and analytical skills generates positive wage externalities. Particularly university graduates and workers without formal education benefit most from these agglomeration economies.

Suggested Citation

  • Ehrl, Philipp & Monteiro Monasterio, Leonardo, 2016. "Historical trades, skills and agglomeration economies," MPRA Paper 69829, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:69829
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    3. Edivaldo C. Neves Jr & Carlos R. Azzoni, Andre Chagas, 2017. "Skill wage premium and city size," Working Papers, Department of Economics 2017_19, University of São Paulo (FEA-USP).

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    More about this item

    Keywords

    agglomeration economies; skills; long-run industrial development; Brazil;
    All these keywords.

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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