Estimating a return to education für Germany as a whole gives one return on human capital on average. This article extends the existing literature using a regional perspective. On a federal-state-level the regional returns are estimable. Therefore the dataset is separated due to regional...

"We study a two-sector economy with investments in human and physical capital and imperfect labor markets. Human and physical capital are heterogeneous. Workers and firms endogenously select the sector they are active in and choose the amount of their sector-specific investments. To enter the...