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Local Multipliers and Human Capital in the US and Sweden

Author

Listed:
  • Moretti, Enrico

    (Department of Economics)

  • Thulin, Per

    (Swedish Entrepreneurship Forum)

Abstract
We show that every time a local economy generates a new job by attracting a new business in the traded sector, a significant number of additional jobs are created in the non-traded sector. This multiplier effect is particularly large for jobs with high levels of human capital and for high tech industries. These findings are important for local development policies, as they suggest that in order to increase local employment levels, municipalities should target high tech employers with high levels of human capital.

Suggested Citation

  • Moretti, Enrico & Thulin, Per, 2012. "Local Multipliers and Human Capital in the US and Sweden," Working Paper Series 914, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0914
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    References listed on IDEAS

    as
    1. Timothy J. Bartik & Randal W. Eberts, 2012. "The Roles of Tax Incentives and Other business Incentives in Local Economic Development," Book chapters authored by Upjohn Institute researchers, in: Nancy Brooks & Kieran Donaghy & Gerrit-Jan Knaap (ed.),Oxford Handbook of Urban Economics and Planning, pages 634-654, W.E. Upjohn Institute for Employment Research.
    2. Kristian Behrens & Gilles Duranton & Frédéric Robert-Nicoud, 2014. "Productive Cities: Sorting, Selection, and Agglomeration," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 507-553.
    3. Michael Greenstone & Richard Hornbeck & Enrico Moretti, 2010. "Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings," Journal of Political Economy, University of Chicago Press, vol. 118(3), pages 536-598, June.
    4. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, December.
    5. Michael Greenstone & Enrico Moretti, 2003. "Bidding for Industrial Plants: Does Winning a 'Million Dollar Plant' Increase Welfare?," NBER Working Papers 9844, National Bureau of Economic Research, Inc.
    6. Edward L. Glaeser & Joshua D. Gottlieb, 2008. "The Economics of Place-Making Policies," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 155-253.
    7. Timothy J. Bartik, 2004. "Economic Development," Book chapters authored by Upjohn Institute researchers, in: J. Richard Aronson & Eli Schwartz (ed.),Managememnt Policies in Local Government Finance, pages 355-390, W.E. Upjohn Institute for Employment Research.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Clement Malgouyres, 2013. "*Trade Shocks** and Local Employment Multipliers: Evidence from France," ERSA conference papers ersa13p667, European Regional Science Association.
    2. Sven-Olov Daunfeldt & Niklas Elert & Dan Johansson, 2016. "Are high-growth firms overrepresented in high-tech industries?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(1), pages 1-21.
    3. Pontus Braunerhjelm & Magnus Henrekson, 2013. "Entrepreneurship, institutions, and economic dynamism: lessons from a comparison of the United States and Sweden," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(1), pages 107-130, February.
    4. Neil Lee & Stephen Clarke, 2017. "Who gains from high-tech growth? High-technology multipliers, employment and wages in Britain," SPRU Working Paper Series 2017-14, SPRU - Science Policy Research Unit, University of Sussex Business School.
    5. Ilanit Gavious & Yaron Lahav & Meir Russ, 2016. "Changes in the value implications of compensation costs throughout the economic cycle: an examination of high-tech versus low-tech industries," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(2), pages 200-223, June.
    6. Giorgio Barba Navaretti & Anthony J. Venables, 2013. "Multinationals and industrial policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 29(2), pages 361-382, SUMMER.
    7. Marta Auricchio, 2015. "Local Manufacturing Multiplier, Technology Level and Human Capital in Italian Local Labor Markets," ERSA conference papers ersa15p1381, European Regional Science Association.
    8. Davide Consoli & Mabel Sánchez-Barrioluengo, 2016. "Polarization and the growth of low-skill employment in Spanish Local Labor Markets," Papers in Evolutionary Economic Geography (PEEG) 1628, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2016.

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    More about this item

    Keywords

    Local multipliers; Local labor markets; Labor demand;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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