The phantom of the opera: Cultural amenities, human capital, and regional economic growth

Citation

Falck O, Fritsch M & Heblich S (2011) The phantom of the opera: Cultural amenities, human capital, and regional economic growth. Labour Economics, 18 (6), pp. 755-766. https://doi.org/10.1016/j.labeco.2011.06.004

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 sights. 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. 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

Journal
Labour Economics: Volume 18, Issue 6