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<p>In this paper, we investigate the effects of the spatial extent of human capital externalities on the wage earnings within the cities in Brazil. To this end, we use a geo-referenced employer–employee panel data and different spatial distance bands. We deal with spatial sorting and endogeneity in the wage-human capital externalities relationship using controls for observable and unobservable individual and establishment characteristics and a shift-share regression design based on the exogenous expansion of higher education in the country. Our set of evidence indicates that the positive effects of human capital externalities on individual productivity rapidly diminish with the distance to the worker’s location, and this Brazilian pattern of spatial decay seems to be even steeper than that observed in developed countries. We found that adding 1,000 college-educated workers up to 1&#xa0;km would increase the wages of workers by 6.78 percent on average. This effect is about 3.5 and 5.3 times larger than on the 1-5&#xa0;km and 5-10&#xa0;km human capital variables. These results are robust to different checks, including new sets of controls and samples, and are not explained by other sources of agglomeration gains, such as those related to worker–plant and worker−city matches and the size of general population.</p>

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The spatial extent of human capital spillovers: evidence from the Brazilian labor market

  • 期刊论文

  • 发表日期：

    2026年3月5日

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  • Edilberto Almeida,
  • Raul da Mota Silveira Neto,
  • Roberta de Moraes Rocha

摘要

In this paper, we investigate the effects of the spatial extent of human capital externalities on the wage earnings within the cities in Brazil. To this end, we use a geo-referenced employer–employee panel data and different spatial distance bands. We deal with spatial sorting and endogeneity in the wage-human capital externalities relationship using controls for observable and unobservable individual and establishment characteristics and a shift-share regression design based on the exogenous expansion of higher education in the country. Our set of evidence indicates that the positive effects of human capital externalities on individual productivity rapidly diminish with the distance to the worker’s location, and this Brazilian pattern of spatial decay seems to be even steeper than that observed in developed countries. We found that adding 1,000 college-educated workers up to 1 km would increase the wages of workers by 6.78 percent on average. This effect is about 3.5 and 5.3 times larger than on the 1-5 km and 5-10 km human capital variables. These results are robust to different checks, including new sets of controls and samples, and are not explained by other sources of agglomeration gains, such as those related to worker–plant and worker−city matches and the size of general population.