Human Capital Differentials Across Urban and Rural Areas in Italy. The Role of Migrations

Abstract

Differences in human capital endowment between the standard partition of Italy (North–South) are pronounced. The divide between urban and rural areas is even more remarkable, with the former showing also faster accumulation rate. Using data from civil registries and survey on graduates, we show that mobility plays a crucial role in explaining this accumulation gap. Urban areas of the North drain human capital from rural and urban locations of the South, but they lose graduates in favor of foreign countries. Urban movers are positively selected according to familiar background and secondary school grades. Moreover, in comparison to stayers, they are more likely to hold a university degree associated with better labour market prospects. Migrations of graduates are responsive to labour market conditions, to university supply, to house prices and—most importantly—to local human capital endowment.