Remoteness equals backwardness? Human capital and market access in the European regions: insights from the long run

In a recent contribution, Redding and Schott [2003. “Distance, Skill Deepening and Development: Will Peripheral Countries Ever Get Rich?” Journal of Development Economics 72 (2): 515–541. doi:10.1016/S0304-3878(03)00118-4] add human capital to a two sector NEG model, highlighting that remoteness represents a penalty that gives disincentives to invest in human capital. But is this hypothesis consistent with long-term evidence? We test the persistence of this effect at the regional level in an historical setting. The results show that market access has a significant positive influence on human capital in OLS, Tobit and IV regression models. Thus, the paper confirms the ‘penalty of remoteness’ hypothesis for Europe in the long run.

DIEBOLT Claude;  HIPPE Ralph; 

2017-11-30

ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD,

JRC106685

0964-5292,   

http://www.tandfonline.com/doi/full/10.1080/09645292.2017.1401979,    https://publications.jrc.ec.europa.eu/repository/handle/JRC106685,   

10.1080/09645292.2017.1401979,