Productivity and the Density of Human Capital - Federal Reserve Bank of New York

Museum & Tours Regional Economy Data & Statistics Careers Blog Press Center

About the New York Fed
- About the New York Fed
- What We Do
- Governance
- Diversity and Inclusion
- Advisory Groups
- Events
- Vendor Information
- Working within the Federal Reserve System, the New York Fed implements monetary policy, supervises and regulates financial institutions and helps maintain the nation's payment systems.
  
  Do you have a Freedom of Information request? Learn how to submit it.
  
  See the world's largest accumulation of gold as you learn about the New York Fed and Federal Reserve System on a free tour.
  
  The latest Annual Report chronicles the impact of Federal Reserve policies and includes data on the New York Fed's operations.
Markets & Policy Implementation

Economic Research
- Economic Research
- Data & Indicators
- Publications
- PEOPLE
- Liberty Street Economics Blog
- Our economists engage in scholarly research and policy-oriented analysis on a wide range of important issues.
  
  The Weekly Economic Index provides an informative signal of the state of the U.S. economy based on high-frequency data reported daily or weekly.
  
  The Center for Microeconomic Data offers wide-ranging data and analysis on the finances and economic expectations of U.S. households.
  
  The monthly Empire State Manufacturing Survey tracks the sentiment of New York State manufacturing executives regarding business conditions.
Financial Institution Supervision
- Financial Institution Supervision
- Supervision & Regulation
  - Circulars
  - Regulations
- Reporting Forms & Instructions
  - Reporting Forms
  - Correspondence
- Bank Applications
- Consumer Protection
  - Community Reinvestment Act Exams
  - Frauds and Scams
- As part of our core mission, we supervise and regulate financial institutions in the Second District. Our primary objective is to maintain a safe and competitive U.S. and global banking system.
  
  The Governance & Culture Reform hub is designed to foster discussion about corporate governance and the reform of culture and behavior in the financial services industry.
  
  Need to file a report with the New York Fed? Here are all of the forms, instructions and other information related to regulatory and statistical reporting in one spot.
  
  The New York Fed works to protect consumers as well as provides information and resources on how to avoid and report specific scams.
Financial Services & Infrastructure
- Financial Services & Infrastructure
- Financial Services & Operations
- Financial Market Infrastructure & Reform
- The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
  
  The New York Fed provides a wide range of payment services for financial institutions and the U.S. government.
  
  The New York Fed offers the Central Banking Seminar and several specialized courses for central bankers and financial supervisors.
  
  The New York Fed has been working with tri-party repo market participants to make changes to improve the resiliency of the market to financial stress.
Community Development
& Education

Staff Reports

Productivity and the Density of Human Capital

March 2010 Number 440
Revised: September 2011

JEL classification: R12, R30, J24, O40

Authors: Jaison Abel, Ishita Dey, and Todd M. Gabe

We estimate a model of urban productivity in which the agglomeration effect of density is enhanced by a metropolitan area’s stock of human capital. Estimation accounts for potential biases due to the endogeneity of density and industrial composition effects. Using new information on output per worker for U.S. metropolitan areas along with a measure of density that accounts for the spatial distribution of population, we find that a doubling of density increases productivity by 2 to 4 percent. Consistent with theories of learning and knowledge spillovers in cities, we demonstrate that the elasticity of average labor productivity with respect to density increases with human capital. Metropolitan areas with a human capital stock one standard deviation below the mean realize no productivity gain, while doubling density in metropolitan areas with a human capital stock one standard deviation above the mean yields productivity benefits that are about twice the average. These patterns are particularly pronounced in industries where the exchange of information and sharing of ideas are important parts of the production process.

Available only in PDF pdf

51 pages / 610 kb

For a published version of this report, see Jaison Abel, Ishita Dey, and Todd M. Gabe, "Productivity and the Density of Human Capital," Journal of Regional Science 52, no. 4 (October 2012): 562-86.

Tools

E-mail Alerts

By continuing to use our site, you agree to our Terms of Use and Privacy Statement. You can learn more about how we use cookies by reviewing our Privacy Statement.