The spatial decay of human capital externalities - A functional regression approach with precise geo-referenced data

This paper analyzes human capital externalities from high-skilled workers by applying functional regression to precise geocoded register data. Functional enables us describe the concentration of around workplaces as continuous curves and efficiently estimate a spillover function determined distance. Furthermore, our rich panel data allow address sorting disentangle supply effects using an extensive set time-varying fixed effects. Our estimates reveal that attenuate with increasing distance disappear after 25 km. Externalities immediate neighborhood establishment are twice large surroundings 10 km away.