Distrubution Of Human Capital: A Study On Turkish Regions

Distrubution Of Human Capital: A Study On Turkish Regions

Zekeriya , Mizirak

Firms’ location choice causes regional economic differences. The conventional view of firms’ location relies on cost-related factors such as tax breaks and subsidies. Human capital theory of regional development asserts that people are the motor force behind the regional growth. According to proponents of the human capital theory, regional growth is driven by endowments of highly educated and productive people instead of reducing costs of business or low costs of resources. In a world in which people are highly mobile, human capital is not a given endowment. Under the new regime of geography in which jobs follow labor instead of labor force follows jobs, wherever intelligence clusters evolve, so too will wealth accumulate. Firstly, Jacobs attracted attention to the ability of cities to attract creative people and thus spur economic growth. To sustain innovation attracting and retaining human capital is believed a crucial role. Firms want to reap the benefits from skilled labor pool.Places with greater number of highly educated people grow faster and better able to attract more talent. There are three linkages between human capital and regional growth. Firstly, concentration of creative and highly educated people through accumulation of knowledge and productivity in existing firms. Human capital enables both product and process innovations. Second explanation is related to inter firm dynamics. Highly human capital endowed people rapidly adapt new ideas and technologies; therefore industrial shift in these human capital endowed regions is rather easier. Not only they succeed in existing mature firms, but also they start new enterprises, thus contribute into economic activity. This linkage is called reinvention view of human capital. Third explanation is about consumption patterns of educated people. Human capital causes growth by spending effect. Since they have higher incomes, they spend much on leisure activities like bars, restaurants and theatres. Their spending habits create employment for the unskilled. In this paper we will test the relationship between the human capital endowment of the regions and determinants of its regional distribution. Job opportunities, regional amenities and diversity can affect the distribution of human capital. Keywords: Regional development, human capital, location choice

Conference or Workshop Item
PeerReviewed

2012-05-31

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