This paper analyzes the determinants of local human capital (HC) endowment by means of an empirical study on Spanish regions. It represents a contribution at the interface of two consolidated areas of research. On the one hand, the literature on economic geography that articulates in great detail the effect of local characteristics on the performance of a regional economy. With respect to this, we argue that the traditional measures of HC in these studies mostly focus on the supply-side (i.e. total number of graduates) but neglect the dynamics of local labour markets. On the other hand the labour economics literature proposes a more nuanced approach based on the study of changes in the relative demand of workers’ skill. Here, we argue, this more direct measure of labour market dynamics is rarely used to capture the specificities of the attendant regional context. We bring together these two strands of literature to analyse the interplay between demand and supply of skills across 17 regions in Spain. Our analysis captures the effect of regional factor bias by using a novel indicator of university orientation through mission engagement as well as various local techno-economic characteristics. The main finding is that university orientation bears a differential effect on local labour markets. Accordingly we identify three groups: research-oriented regions (leaders); industry intensive regions (followers) and a group of backward regions (laggards) to capture differences in terms of underlying factors influencing skill patterns change.
|Name and Edition of Conference||15th International Conference of the International Joseph A. Schumpeter Society (ISS)|