Creativity, talent, and regional wages in Sweden

While there is consensus on the importance of human capital to economic development, debate takes shape around two central issues. First, there is the question of how best to measure human capital. Second, there is debate over the factors that yield the geographic distribution of human capital in the first place. We find that occupational or "creative class" measures tend to outperform educational measures accounting for regional wages per capita across our sample of Swedish regions. In addition, universities, service diversity, and tolerance affect the distribution of human capital, though in different ways and thus play complementary roles in the geographic distribution of talent.