Inside the black box of regional development--human capital, the creative class and tolerance

While there is a general consensus on the importance of human capital to regional development, debate has emerged around two key issues. The first involves the efficacy of educational versus occupational measures (i.e. the creative class) of human capital, while the second revolves around the factors that affect its distribution. We use structural equation models and path analysis to examine the relations from these two alternative measures of human capital and regional income and wages, and also to isolate the relations of tolerance, consumer service amenities and the university on its distribution. We find that human capital and the creative class affect regional development through different channels. The…