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The impact of human capital on labour productivity in manufacturing sectors of the European Union

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  • Cörvers, Frank

    (RS: SBE - MACIMIDE, ROA / Human capital in the region, RS: GSBE DUHR)

Abstract

The effects of human capital on both the level and growth of labour productivity in manufacturing sectors in seven member states of the European Union are analysed, distinguishing between four effects of human capital: worker, allocative, diffusion and research. Human capital is represented by the shares of intermediate and highly-skilled workers in the workforce of a sector. It is shown that the manufacturing sectors can be divided into three classes of sectors with different intensities of highly-skilled workers: low-, medium- and high-skill sectors. The estimation results show that both intermediate and highly-skilled labour have a positive effect on the labour productivity of a sector, although the effect is only significant for highly-skilled labour. Moreover, there are indications of underinvestment of human capital in some manufacturing sectors. These sectors could improve their competitive position by raising the employment shares of intermediate and highly-skilled labour. Finally, intermediate-skilled labour has a significantly positive effect on the growth in sectoral labour productivity.
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Suggested Citation

  • Cörvers, Frank, 1996. "The impact of human capital on labour productivity in manufacturing sectors of the European Union," ROA Research Memorandum 2E, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    • Handle: RePEc:unm:umaror:19962e
    DOI: 10.26481/umaror.199602E
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    Cited by:

    1. Sabatini, Fabio, 2006. "Social Capital and Labour Productivity in Italy," Knowledge, Technology, Human Capital Working Papers 12090, Fondazione Eni Enrico Mattei (FEEM).
    2. Fabio Sabatini, 2005. "Does Social Capital Improve Labour Productivity in Small and Medium Enterprises?," Others 0509011, University Library of Munich, Germany.
    3. Aleksandra Kordalska & Magdalena Olczyk, 2020. "What fosters firm-level labour productivity in Eastern European and Central Asian countries?," Bank i Kredyt, Narodowy Bank Polski, vol. 51(1), pages 91-120.
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    5. Oreggia, Eduardo, 2000. "Education Policies And Labour Markets: The Effect On Regional Growth In Mexico," ERSA conference papers ersa00p515, European Regional Science Association.
    6. Wacker, John G. & Yang, Chen-Lung & Sheu, Chwen, 2006. "Productivity of production labor, non-production labor, and capital: An international study," International Journal of Production Economics, Elsevier, vol. 103(2), pages 863-872, October.
    7. Fallahi, Firouz & Sakineh, Sojoodi & Mehin Aslaninia, Nasim, 2010. "Determinants of Labor Productivity in Iran’s Manufacturing Firms: With Emphasis on Labor Education and Training," MPRA Paper 27447, University Library of Munich, Germany.
    8. Peter Howard-Jones & Jens Hölscher & Dragana Radicic, 2017. "Firm Productivity In The Western Balkans: The Impact Of European Union Membership And Access To Finance," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 62(215), pages 7-52, October –.
    9. Dimov, Dimo P. & Shepherd, Dean A., 2005. "Human capital theory and venture capital firms: exploring "home runs" and "strike outs"," Journal of Business Venturing, Elsevier, vol. 20(1), pages 1-21, January.
    10. Lei Delsen & Mark Schonewille, 1999. "Human Capital and Labour Productivity, Integration of Institutions and Endogenous Growth," HEW 9908001, University Library of Munich, Germany.
    11. Ishengoma, Esther K. & Kappel, Robert, 2008. "Business Constraints and Growth Potential of Micro and Small Manufacturing Enterprises in Uganda," GIGA Working Papers 78, GIGA German Institute of Global and Area Studies.
    12. Lawrence Arokiasamy & Takemi Fujikawa & Shishi Kumar Piaralal & Thilageswary Arumugam, 2023. "A systematic review of literature on Human capital investment and its significance for human resource development," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 14(5), pages 1810-1826, October.
    13. Mohamad Yunus, Norhanishah & Said, Rusmawati & Law, Siong Hook, 2014. "Do Cost of Training, Education Level and R&D Investment Matter towards Influencing Labour Productivity?," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 48(1), pages 133-142.
    14. Norhanishah Mohamad Yunus & Tajul Ariffin Masron, 2020. "Spillover Effects of Inward Foreign Direct Investment on Labour Productivity: An Analysis on Skill Composition in Manufacturing Industry," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 10(10), pages 593-611, October.
    15. Pål Børing, 2014. "The Impact Of Manufacturing Firms’ Use Of Academic Workers On Their Productivity Level," Bulletin of Economic Research, Wiley Blackwell, vol. 66(2), pages 156-172, April.
    16. Fabio Sabatini, 2005. "Does Social Capital Improve Labour Productivity in Small and Medium Enterprises?," Others 0508005, University Library of Munich, Germany.
    17. Cörvers, Frank & Reininga, T., 1998. "The Dutch factor content of human and physical capital: a test of the HOV model," ROA Research Memorandum 1E, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    18. Fabio Sabatini, 2006. "Does Social Capital Improve Labour Productivity in Small and Medium Enterprises," Working Papers in Public Economics 92, University of Rome La Sapienza, Department of Economics and Law.
    19. Oseni, Isiaq Olasunkanmi & Oyelade, Aduralere O., 2023. "Effect of Capital Expenditure on Unemployment Rate in Nigeria," African Journal of Economic Review, African Journal of Economic Review, vol. 11(3), June.
    20. Cörvers F. & Reininga T., 1998. "The Dutch Factor Content of Human and Physical Capital: A Test of the HOV Model," ROA Research Memorandum 001, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    21. Jan M.P. de Kok, 2000. "The Impact of Firm-Provided Training on Production: Testing for Firm-Size Effects," Tinbergen Institute Discussion Papers 00-073/3, Tinbergen Institute.
    22. Adamu Jibir & Musa Abdu & Abdullahi Buba, 2023. "Does Human Capital Influence Labor Productivity? Evidence from Nigerian Manufacturing and Service Firms," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 805-830, June.
    23. Kronenberg, Kristin & Carree, Martin, 2010. "The effects of workforce composition, labor turnover, and the qualities of entering and exiting workers on productivity growth," MPRA Paper 25844, University Library of Munich, Germany.
    24. Pasquale Tridico & Sebastiano Fadda & Antonella Mennella, 2014. "Flexibility and Productivity: The Case of the Labour Supply Contract Agreement in Italy," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, September.
    25. Valentina TESLENKO, 2020. "The Impact Of The Quality Of Human Capital And State Educational Policy On The Development Of High-Tech Companies In Russian Regions," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 20(2), pages 51-64.

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