Human capital and metropolitan employment growth

I propose that cities with higher average levels of human capital should experience faster employment growth. Using data on all U.S. metropolitan areas (MSAs) over the period 1940-86, I found a positive, large, and persistent relationship between human capital and MSA growth. I also found evidence of spillovers between cities within MSAs: city employment growth was positively related to human capital elsewhere within the MSA. However, I also found that differences between cities in human capital helped explain differences in employment growth within MSAs, which suggests that the effects of human capital are at least partly localized at the city level. (C) 1998 Academic Press.