Human Capital and Employment Growth in German Metropolitan Areas: New Evidence

International audienceGerman metropolitan areas with more highly skilled workers became increasingly skilled between 1975 and 2003. Using German metropolitan areas instead of administrative regions we show that conventional estimates are biased upwards. Solving a common problem of under-identification shows that the effect is at least a third smaller. Secondly, we question that aggregate productivity growth is solely due to college graduates. We find positive growth effects of high school graduates with vocational training, and complementarities with technical professionals. Thirdly, data on East German cities reveals important differences in the distribution of skills across cities between East and West Germany. We find however that the impact of skills and their mutual complementarities on growth is stable across German regions