From the industrial revolution to the emergence of the so-called knowledge economy,
history has shown that economic development has taken place unevenly across regions. A
region’s economy is a complex mix of varying types of geographical locations
comprising different kinds of economic structures, institutions, and infrastructure.
Policies that treat an economy as a homogenous unit across space neglect the role of
spatial dependencies within it. The operation of human capital and knowledge spillovers
play an important role in generating these regional dependencies and disparities. It has
been demonstrated that regions located in an economic periphery experience lower
returns to skill attainment and hence have reduced incentives for human capital
investments and agglomerations. As a result of emerging core-periphery boundaries,
human capital levels are increasingly diverging across regions. The concentration of
economic activity and human capital agglomeration is inevitable and desirable for
growth, but the spatial differences in welfare levels that accompany them can be reduced.
Policy assistance at regional levels can mitigate such inequalities in the creation and
distribution of human capital.
The over all aim is to identify, measure, and model the temporal relationship
between space and human capital across Pakistan. It will examine the links between
human capital dispersion and regional growth inequalities by taking into account regionspecific
factors (such as geography and demography), sector-specific factors (such as
human and physical capital intensity), and the interactions among them. Specifically, by
using panel data at district level from 1970 to 2007, it will apply exploratory and spatial
econometric techniques to determine the temporal effect of distance and contiguity
among Pakistan’s 113 administrative districts on their human capital characteristics and
agglomeration. This technique will provide some of the first spatially explicit correlations
between Pakistan’s administrative districts and their human capital characteristics.