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Journal of Economic Geography Advance Access originally published online on July 21, 2008
Journal of Economic Geography 2008 8(5):615-649; doi:10.1093/jeg/lbn023
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© The Author (2008). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

This article appears in the following Journal of Economic Geography issue: Geography and the Cultural Economy [View the issue table of contents]

Inside the black box of regional development—human capital, the creative class and tolerance

Richard Florida*, Charlotta Mellander** and Kevin Stolarick*

*Martin Prosperity Institute, Rotman School of Management, University of Toronto, Toronto, Canada.
**Prosperity Institute of Scandinavia, Jönköping International Business School, Jönköping, Sweden.

email <florida{at}rotman.utoronto.ca>

JEL classifications: O30, R10, R20, J24

While there is a general consensus on the importance of human capital to regional development, debate has emerged around two key issues. The first involves the efficacy of educational versus occupational measures (i.e. the creative class) of human capital, while the second revolves around the factors that affect its distribution. We use structural equation models and path analysis to examine the relations from these two alternative measures of human capital and regional income and wages, and also to isolate the relations of tolerance, consumer service amenities and the university on its distribution. We find that human capital and the creative class affect regional development through different channels. The creative class outperforms conventional educational attainment measures in accounting for regional labor productivity measured as wages, while conventional human capital does better in accounting for regional income. We find that tolerance is significantly associated with both human capital and the creative class as well as with wages and income. We also find that the cultural economy has both direct and indirect relationships to regional development and impacts both production and consumption.

Keywords: human capital, creative class, tolerance, wages, income, regional development
Date submitted: 1 May 2007     Date accepted: 1 February 2008


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