The Geography of Human Capital

The stock of human capital has a crucial effect on regional development. This is one of Marco Percoco's research areas of interest. In Regional Disparities in Italy over the Long Run: the Role of Human Capital and Trade Policy, a paper co-authored with Luisa Gagliardi, the Associate Professor at Bocconi University aims to untangle the origins of development disparities between the North and the South of Italy.

"The initial economic condition is not the only driving force for regional growth. In fact, there is no evidence of income disparities in the aftermath of Italy's unification". There was however a relevant gap in human capital stock: the schooling rate was considerably higher in the North. "This inactive human capital revealed itself on the eve of the industrialization period, when educated workers proved more productive than their uneducated colleagues. In the presence of an agglomeration economy, the public expenditure on education in the South failed to bridge the gap".

A regional health shock can reduce or increase the human capital accumulation and exercise a long-term effect on a territory. This is the case of the Spanish flu and the eradication of malaria in Italian regions, the subjects of two other papers by Percoco. "Cognitive abilities have foetal origins and are influenced by the quality of life in the baby's first three years. The Spanish flu reduced the years of schooling in individuals born between 1918 and 1920. On the contrary, the eradication of malaria in southern regions in the period 1945-50 increased them". The human capital is persistent: the effects on labor productivity manifest themselves after decades and in the case of malaria are intergenerational.

Read the other stories on the topic of Human Capital:

We Are Who We Hire
Gig Economy: What Rights for Workers?
The Chosen People who Invested on Themselves
Not only CEOs, the Importance of the Manager
Investing Time in Children Pays
Uncertain Victor, Better Candidates
The Importance of Incentives
The Consequences of Uncertainty on Families
Autonomy in Decision Making: the Right Balance is Required
Not all Directors have the Same Value