Cultural amenities attract highly skilled workers

This research was conducted by Oliver Falck and three others at the University of Munich and other universities

Summary

This research looked at German data to demonstrate that cultural amenities play an important role in attracting highly skilled workers to a location. This leads to yet more highly skilled people moving to those areas and results in positive spillover impacts for the communities living there.

The paper focused on opera houses in West Germany

The study used a sample of people from a large West German social security dataset, looking at data for the years between 1975 and 2010. They compared where mobile workers chose to live against the location of 36 cultural amenities across the country. Broadly, cultural amenities comprise places like theatres and concert halls, but specifically for the purpose of this study the researchers looked at baroque opera houses.

The paper grapples with a “chicken-and-egg” problem

The problem is one faced by those developing place-based cultural policies: does the presence of cultural amenities draw highly skilled workers, or does a critical mass of highly skilled workers lead to the development of cultural amenities? They found that in this case it was the former, and used many techniques to ensure that it was the cultural amenity (and not other factors) that drew people to specific locations.

The study provides an argument for public subsidy of opera

The results of this paper show that highly skilled workers are attracted to places with cultural amenities, through their productivity those incoming highly skilled workers raise the wages of others in the locality, and therefore according to the authors, this provides some justification to the public subsidy of those cultural amenities.