Certified and uncertified skills and productivity growth performance: cross-country evidence at industry level

We analyse the relationship between human capital and productivity growth using a five-country multi-industry dataset together with a measure of human capital which accounts for both certified skills (educational qualifications) and uncertified skills acquired through on-the-job training and experience. We find evidence of positive human capital effects on growth in average labour productivity, particularly when using our composite human capital measure. We also find some tentative evidence that multi-factor productivity (MFP) growth is positively related to the use of high-skilled labour. However, externalities of this kind are largely confined to industries which make intensive use of university graduates. (abstract as appears on publisher website)

Highlights:
• Our measure of human capital accounts for both certified and uncertified skills.
• Human capital positively affects productivity in the short and in the long run.
• There is weak evidence of human capital externalities.
• The impact of human capital in not stronger for countries closer to the frontier.