Positive Geographical Spillovers of Human Capital on Student Learning Outcomes

Human capital spillovers arise when the presence of individuals with high levels of human capital makes others more productive. If the students’ higher achievement scores are associated with human capital spillovers, a social return to education is generated. In this context, this paper developed the rationale and statistic methods for examining the association between regional human capital stocks and student learning outcomes. We used PISA data for Spain from the 2015 wave. On average, 15-year-old students scored 486 points in mathematics, but there were statistically significant differences across the 17 regions of Spain (comunidades autónomas). Three-level regression modeling showed that an extra year of region-level average schooling is associated with PISA math scores 14.5 points higher, after controlling for student and school level variables. We used mediation analysis to test whether educational expectations mediated this effect of regional human capital on student achievement. The mediation analysis showed that students who live in regions with a high prevalence of well-educated residents expect more years of education and perform better on the PISA test. This paper also found that the current expenditure per student in the different comunidades autónomas does not explain the regional differences in math performance.