DOES URBANIZATION FOSTER HUMAN CAPITAL ACCUMULATION?*

The literature on growth theory has pointed to the importance of human capital in order to explain the process of economic development. In the present study, we highlight the role played by cities in fostering human capital accumulation. More particularly, building on a simple urban economics model, we perform cross-country estimations, measuring the relation between human capital accumulation and urbanization. Our results support the result according to which more urbanization induces higher rates of human capital accumulation, but only above a certain threshold level of development. This latter result raises policy concerns on issues related to over-urbanization