Identification of the strength of human capital externalities at the aggregate level is still not fully understood. The existing method may yield positive or negative externalities even if wages reflect marginal social products. We propose an approach that yields positive average human capital...

We combine growth theory with US Census data on individual schooling and wages to estimate the aggregate return to human capital and human capital externalities in cities. Our estimates imply that a one year increase in average schooling in cities increases their aggregate labour productivity by...

A series of recent influential papers has emphasized that in order to identify the wage effects of immigration one needs to consider national effects by skill level. The criticism to the so called ʺarea approachʺ is based on the fact that native workers are mobile and would eliminate, in the...

I show that a CES production-function-based approach with skill differentiation and integrated national labor markets has predictions for the employment effect of immigrants at the local level. The model predicts that if I look at the employment (rather than wage) response by skill to...

This paper asks the following important question: what was the effect of surging immigration on average and individual wages of U.S.-born workers during the period 1990-2004? Building on section VII of Borjas (2003) we emphasize the need for a general equilibrium approach to analyze this...

The recent literature on externalities of schooling in the U.S. is rather mixed: positive external effects of average education are hardly found at all, while often positive externalities from the share of college graduates are identified. This paper proposes a simple model to explain this fact...

This paper explores the relationship between economic openness and income per person using cross-country data. To address endogeneity concerns we extend the instrumental-variables strategy first used by Frankel and Romer (1999). First, we show that bilateral geographic characteristics of...