The Phantom of the Opera: Cultural Amenities, Human Capital, and Regional Economic Growth

42 Pages Posted: 15 Feb 2020

See all articles by Oliver Falck

Oliver Falck

CESifo (Center for Economic Studies and Ifo Institute) - Department Human Capital and Innovation

Michael Fritsch

University of Jena - School of Economics and Business Administration

Stephan Heblich

University of Stirling - Department of Economics

Abstract

We analyze the extent to which endogenous cultural amenities affect the spatial equilibrium share of high-human-capital employees. To overcome endogeneity, we draw on a quasi-natural experiment in German history and exploit the exogenous spatial distribution of baroque opera houses built as a part of rulers' competition for prestigious cultural amenities. Robustness tests confirm our strategy and strengthen the finding that proximity to a baroque opera house significantly affects the spatial equilibrium share of high-human-capital employees. Then, a cross-region growth regression shows that these employees induce local knowledge spillovers and shift a location to a higher growth path.

Keywords: cultural amenities, regional economic growth, human capital, Bohemians

JEL Classification: H41, R11, J24

Suggested Citation

Falck, Oliver and Fritsch, Michael and Heblich, Stephan, The Phantom of the Opera: Cultural Amenities, Human Capital, and Regional Economic Growth. IZA Discussion Paper No. 5065, Available at SSRN: https://ssrn.com/abstract=1648350

Oliver Falck (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Department Human Capital and Innovation ( email )

Poschingerstr. 5
Munich, 81679
Germany

Michael Fritsch

University of Jena - School of Economics and Business Administration ( email )

Carl-Zeiss-Str. 3
D-07743 Jena
Germany

Stephan Heblich

University of Stirling - Department of Economics ( email )

Stirling, Scotland FK9 4LA
United Kingdom

HOME PAGE: http://www.management.stir.ac.uk/people/economics/academic-staff/dr-stephan-heblich

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