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Skills
EnterpriseNoteNo.43
EducatedWorkersandManagersintheEU-27*
MohammadAmin
misBriefhighlightsissuesrelatedtotheeducationandskilllevelofworkersandtopmanagersinfirmsin27EuropeanUnioncountries(theEU-27),usingtheWorldBankEnterpriseSurveys(WBES).meexerciseisanimportantsteptowardunderstandingtheuseofskilledandadequately
T
PublicDisclosureAuthorized
educatedworkersandtopmanagersbyafirmanditslikelyefects.meBriefidentifiesseveralfactorsattheNUTS2regionlevelandfirmlevelthatarecorrelatedwiththedi般cultyfirmsfaceinobtainingadequatelyeducatedworkersaswellastheskilllevelandeducationleveloftheworkersandtopmanagers.Somewhatsurprisingly,incomeperinhabitantintheNUTS2regionsisnotastrongpredictoroftheuseofskilledandeducatedworkersandtopmanagersorfirms’reporteddi般cultyinfindingadequatelyeducatedworkers.Severalfirmperformancemeasures—suchaslaborproductivity,employmentgrowth,exporting,researchanddevelopment(R&D),andmanagementquality—arefoundtobecorrelatedwiththeuseofskilledandeducatedworkersandtopmanagers.Someofthesecorrelationsdifersharplybetweenlowandhighlevelsoftheoutcomevariables.mereisevidencethattrainingprovidedtoworkersbythefirmsisassociatedwithlessdispersionoflaborproductivitybetweenfirms,andgreateruseofskilledworkersisassociatedwithlessdispersionofwageratesacrossfirms.Overall,theBrieffindsthatstartingatlow-incomelevelsinEUregions,policyfocusneedstoshiftmoretowardensuringtheavailabilityofadequatelyeducatedworkersthanonreducingotherobstaclesastheeconomydevelops.misshiftingofpolicyfocuscanstabilizeaftertheeconomyissu般cientlydeveloped.
Possiblecausesofaninadequatelyeducatedworkforceattheregionlevelandfirmlevel
Morethananyotherconstraint,firmsintheEU–27countries1rankinadequatelyeducatedworkersastheirtopobstacle(seethefirstBriefinthisseries).ForatypicalareaintheEuropeanUnionwithbetweenabout800,000and3millioninhabitants(NUTS2regions),227percentoffirmsreport“aninadequatelyeducatedworkforce”asthetopobstacletotheiroperations.Inmorethanhalfofthe186NUTS2groupingsanalyzedintheseries,thisobstacleisthemostfrequentlycited.Suchfirmsaboundamongfirmsofdiferentsizes,sectors,incomegroups,andages(figure1).However,theirproportionissignificantlyhigheramongmediumandlargefirmscomparedtosmallfirms;manufacturingfirmscomparedtoservicessectorfirms;mostdevelopedNUTS2regionsfollowedbytransitionregionsandthentheleastdevelopedregions;andolderfirms(morethan10years)comparedtoyoungerfirms.mus,thesegroupsoffirmsmaybetargetedbypolicymakersonaprioritybasis.
merearesharpdiferencesbetweenNUTS2regionswithinacountryintheincidenceoffirmscitinginadequatelyeducatedworkforceasthetopobstacle(figure2).mus,itisimportanttoalsoconsiderregionalorNUTS2–levelfactorstounderstandtheproblemofinadequatelyeducatedworkersfacedbyfirms.
Figure2.meshareoffirmsthatreportinadequatelyeducatedworkforceasthetopobstaclevariessubstantiallybetweenNUTS2regions
Understandingregionalcharacteristicsthatarecorrelatedwiththelikelihoodoffirmsreportinginadequatelyeducatedworkforceasthetopobstacleisagoodstartingpointforidentifyingpossiblecausesofaninadequatelyeducatedworkforceanditslikelyefects,thetypeofpoliciesrequiredtoaddresstheproblem,andwhichtypesofpoliciesshouldbetargeted.
Economicdevelopment.memostnaturaldeterminantoftheavailabilityofadequatelyeducatedworkersisthelevelofeconomicdevelopment(seeLangeetal.2018).Macro–levelstudieshaveshownthatrichercountrieshaveamuchhigher
PublicDJanisclosu2re2Authorized,2025
*A扰liations:WorldBank,DevelopmentEconomics,EnterpriseAnalysis.Forcorrespondence:mamin@.
Acknowledgments:仍isBriefisapartofaseriesfocusingonissuesofregionaldisparitiesandgrowthopportunitiesintheEU-27area.仍eseriesisaproductoftheWorldBank’sEnterpriseAnalysisteam(DECEA)andhasbenefittedfromgeneroussupportfromtheEUDGREGIOdirectorate.仍eteamwouldalsoliketothankNormanV.LoayzaandJorgeRodriguezMezaforcommentsandguidingthepublicationprocess.NancyMorrisonprovidedexcellenteditorialassistance.
Objectiveanddisclaimer:仍efindingsinthisseriesofBriefsdonotnecessarilyrepresenttheviewsoftheWorldBankGroup,itsExecutiveDirectors,orthegovernments
theyrepresent.AllBriefsintheseriescanbeaccessedvia:
/en/research/brief/global-indicators-briefs-series
.
ENTERPRISESURVEYS
2
EnterpriseNoteNo.43
Figure1InadequatelyeducatedworkersisthebiggestobstacleforseveraltypesoffirmsinEU-27countries
Source:OriginalcalculationsforthisBriefbasedonWorldBankEnterpriseSurveys.
Note:EU-27=the27membercountriesoftheEuropeanUnion(EU)intheeuroarea.
levelofhumancapitalthanthepoorercountries(seeLange,Wodon,andCarey2018).IstheproblemofinadequatelyeducatedworkerslessseverecomparedtootherobstaclesinthemoredevelopedNUTS2regions?DopolicymakersneedtofocuslessoneducationofworkersandmoreonotherobstaclesasincomeleveloftheNUTS2regionsrises?
medatarevealthatmorefirmsrankinadequatelyeducatedworkersasthetopobstacleasincomeperinhabitantincreases(figure3).However,thisincreasetapersofandbecomesinsignificantaboveacertainthresholdlevelofincome.merearetwoimplicationsforpolicy.First,comparedtopoorerNUTS2regions,richerregionsneedtofocusmoreonensuring
Figure2
Theshareof
substantially
firmsthatreportinadequatelyeducatedworkforceasthetopobstaclevariesbetweenNUTS2regions
Source:OriginalcalculationsforthisBriefbasedonWorldBankEnterpriseSurveys.
Note:NUTS2regionshavebetweenabout800,000and3millioninhabitants.NUTS=NomenclatureofTerritorialUnitsforStatistics.
EnterpriseNoteNo.43
3
Figure3usdis,onceoftenasthetopobstacleastheincomelevelof
Incomeperinhabitant(logs,2019)
Source:OriginalcalculationsforthisBriefbasedonWorldBankEnterpriseSurveys.
Note:NUTS2regionshavebetweenabout800,000and3millioninhabitants.NUTS=NomenclatureofTerritorialUnitsforStatistics.
theavailability,relativetodemand,ofadequatelyeducatedworkersthanonotherobstacles.Second,startingatlow-incomelevels,policyfocusneedstoshiftmoretowardensuringtheavailability,relativetodemand,ofadequatelyeducatedworkersthanonreducingotherobstaclesastheeconomydevelops.misshiftingofpolicyfocuscanstabilizeaftertheeconomyissu伍cientlydeveloped.
Othermeasures.Severalothermeasuresareavailabletocapturetheuseandavailabilityofskilledandadequatelyeducatedworkersandtopmanagers.Somearebasedonfirms’perceptionsandothersareobjectivemeasures.meanalysisthatfollowsfocuseson15indicatorsoftheuseofskilledandeducatedworkersandtopmanagersandfirms’reporteddi伍cultyinfindingthemwhenaveragedattheNUTS2level.meseindicatorspotentiallycaptureboththedemandandsupplyofskilledandeducatedworkersandmanagers.meanalysisexaminestheirrelationshipwithincomeperinhabitantasof2019.meresultsaremixed,
First,asexpected,higherincomeisassociatedwithasignificantlyhighershareofskilledworkersamongproductionworkersinthemanufacturingsectors,andalowershareofsemi-skilledandlow-skilledworkers(figure4).
Second,threeotherindicatorsshowsignificantlybetterskillsavailabilityinthericherNUTS2regions.meseindicatorsaretheproportionoffirmsthatprovidetrainingtotheirworkers;theproportionoffirmsthatfacedi伍cultyinfindingworkerswithforeignlanguageskills;andtheproportionoffirmsthatfacedi伍cultyinfindingworkerswithtechnicalskills(otherthanininformationtechnology,IT),vocationalskills,orjob-specificskills.
mird,threemoreindicatorsshowthattheproportionoffirmsthatfacedi伍cultyfindingworkerswithnaturalsciences,
mathematics,andengineeringskillsissignificantlyhigherinthericherNUTS2regions.
Fourth,theremainingeightindicatorsshownosignificantcorrelationwiththeincomelevel.meseindicatorsaretheproportionoffirmsthatfacedi伍cultyinfindingworkerswithappropriateinterpersonalandcommunicationskills,problemsolvingorcriticalthinkingskills,managerialandleadershipskills,computerorgeneralITskills;theproportionoffirmsthatreportinadequatelyeducatedworkersasthetopobstacle;thepercentageofworkerswithasecondaryeducationinafirmonaverage;thepercentageofworkerswithauniversitydegreeinafirmonaverage;andthepercentageoffirmswiththetopmanagerhavingabachelor’sorhigherdegree.
Foracoupleofvariables,incomemattersatsu伍cientlyhighlevelsbutnototherwise.matis,aboveacertainlevelofincome,butnotbelow,higherincomeisassociatedwithasignificantlyhigherproportionofworkerswithauniversityeducation(figure5)andasignificantlyhigherproportionoffirmswiththetopmanagerhavingabachelor’sorhigherdegree.Summingup,whileeconomicdevelopmentmaysomewhatimprovetheavailabilityofskilledandeducatedworkersandtopmanagersrelativetodemand,itisunlikelytosolvetheproblemofinadequatelyskilledandeducatedworkersandtopmanagersinamajorwayorcompletely.
Differentialsintraining,education,andskillsandtheireffects
Training
FirmsinEU-27countriesoftenprovidetrainingtotheirworkers.InatypicalNUTS2region,43percentofthefirmsprovidesuchtraining.Asmentioned,theproportionoffirms
EnterpriseNoteNo.43
4
Percentoffirms
60
50
40
30
20
10
0
Figure4FirmsinricherNUTS2regionsemploymoreskilledworkersandaremorelikelytoprovidetraining
4949
35
29
Skilledproductionworkers
(%)
%offirmsthatprovidetraining
LeastdevelopedLTransitionandMostdevelopedeastdeveloped
Source:OriginalcalculationsforthisBriefbasedonWorldBankEnterpriseSurveys.
Note:NUTS2regionshavebetweenabout800,000and3millioninhabitants.NUTS=NomenclatureofTerritorialUnitsforStatistics.
thatprovidetrainingincreaseswiththeincomeleveloftheNUTS2regions.However,thisrelationshipislargelydrivenbyNUTS2regionsatthelowendoftheincomedistribution.Aboveacriticallevelofincome,increasesinincomeshownofurtherincreaseintheproportionoffirmsthatprovidetraining.meprovisionoftrainingmaybeespeciallyattractiveforlargefirmsduetothefixedcostsinvolved(seeFrazis,
Gittlemann,andJoyce2000).Afewstudieshavealsoshownthatyoungerfirmsaremorelikelytotrainworkers.IntheEU–27countries,thereisnosignificantrelationshipbetweenthelikelihoodthatafirmprovidestrainingandtheageofthefirm.However,trainingissignificantlymorecommonamonglargefirmsthansmallandmediumenterprises(SMEs).About41percentofSMEscomparedto70percentoflargefirms
Figure5
Theshareofworkerswithauniversitydegreedecreaseswithhigherincomelevelatinitiallevelsofincomebutincreasesathigherlevelsofincome
Incomeperinhabitant(logs)
Source:OriginalcalculationsforthisBriefbasedonWorldBankEnterpriseSurveys.
5
providetraining.AttheNUTS2andfirm-level,trainingismorelikelyamongfirmsthatreportthatinadequatelyeducatedworkersisamoresevereobstacle(on0–4scale)fortheiroperations.mus,itseemsthattrainingisinpartaimedatresolvingtheshortageofskilledworkers.
Oneconcernwithtrainingisthatitmaybeameresubstituteforeducationacquiredoutsidethefirm.misis“traindrain.”Iftrue,itimpliesthatagreateravailabilityofhighereducatedworkersoutsidethefirmmayleadtolesstrainingprovidedbyfirms.Asaresult,trainingbyfirmsmaynotincreasethetotalstockofhumancapitalinthecountry.Bycontrast,ifhighereducationandtrainingarecomplements—aswouldbethecaseifnewlyhiredgraduatesalsoreceivedadditional,on-the-jobtraining—theoverallstockofhumancapitalwillincreaseduetotraining.InthecaseoftheEU-27countries,attheNUTS2level,thereisnoevidenceof“traindrain”foreitheruniversity-educatedorsecondary-educatedworkers.Infact,thereisasignificantpositiverelationshipbetweentrainingandtheshareofuniversity-educatedworkersinafirm,suggestingthattraininganduniversityeducationarecomplements(figure6).
Trainingseemstoalterthedistributionoflaborproductivityacrossfirms.Averagelaborproductivityishigherbyabout48percentforfirmsthatprovidetrainingcomparedtofirmsthatdonot.mediferenceishighlysignificant.Whatismore,thereisevidencethattrainingleadstoamuchalargerimprovementinlaborproductivityofthelessproductivefirmsthanthemoreproductivefirms.3mus,thereisthepossibilitythattrainingmayallowthelessproductivefirmstocatchupwiththemoreproductivefirms(box1).
Educationandskilllevels
OnaverageacrossthetenEU-27countriesforwhichdataareavailable,aboutoneintenworkersintheEU-27hasauniversitydegree.medistributionofuniversity-educatedworkersacrossfirmsisskewed.Only30percentoffirmsemployuniversity-educatedworkersatall.Largefirms,exporters,andforeign-ownedfirmsaremorelikelytoemployuniversity-educatedworkersand,inturn,alsoemployhigherproportionsofuniversity-educatedworkers(table1,columns1and2).FirmsthatspendonR&Dalsohaveproportionatelymoreuniversity-educatedworkers,butthisrelationshipismainlybecausefirmsthatspendonR&Dhappentobelargefirms,whichtendtoemploymoreuniversity-educatedworkers.Akeyconcernforpolicymakersiswhyonlyone-quarterofSMEsemployuniversity-educatedworkersandtheirshareaverageslessthan9percentofallworkers.DoSMEsfindtheseworkerstoocostlyoraretheylackinginthekindsofskillsusefultoSMEs?
MostfirmsintheEU-27countriesuseskilledproductionworkers.Nearly80percentoffirmsemployskilledproductionworkers,andtheaverageshareofskilledworkersamongallproductionworkersinafirmis44percent.Incontrasttouniversity-educatedworkers,theshareofskilledworkersamongproductionworkersdeclinessignificantlywithfirmsize(table1,column3),whiletheshareofthesemi-skilledandlow-skilledworkersincreases.Skilledworkersandsecondary-educatedworkersseemtocomplementeachother.matis,theshareofsecondary-educatedworkersissignificantlyhigherforfirmsthathaveahigherproportionofskilledworkers(table1,column4)andalowerproportionofsemi-and
Figure6FirmsacrossNUTS2regionsseemtoprovidetrainingtouniversity-educatedworkers
%offirmsthatoffertraining
Source:OriginalcalculationsforthisBriefbasedonWorldBankEnterpriseSurveys.
Note:NUTS2regionshavebetweenabout800,000and3millioninhabitants.NUTS=NomenclatureofTerritorialUnitsforStatistics.
EnterpriseNoteNo.43
6
Box1:Canlessproductivefirmscatchupwiththemoreproductivefirmsthroughtraining?
mepossibilityof“catchup”canbetestedusingthemethodologyofCombesetal.(2012).mismethodologytestsfordiferencesinthedistributionofavariablebetweentwogroups.mecomparisonissummarizedinthreekeyparameters—shift,dilation,andtruncation.meseparametersrefertohowmuchthefirstdistributionneedstobealteredtobestapproximatetheseconddistribution.meparametersare(1)arightwardshiftofthefirstdistribution(Shift);(2)whatconstantfactoreachoftheobservationsinthefirstdistributionneedtobedividedbytomatchtheseconddistribution(Dilation);and(3)whatshareoftheobservationsinthefirstdistributionneedtobeexcludedfromitslefttail(Truncation).Intuitively,theShiftparametercapturesthediferenceinthemeanvalueoflaborproductivity,Dilationcapturesifonedistributionismorehomogenousthantheother.TruncationreAectspossibleselectionefectswherebyfirmswithverylowvaluesofthevariableunderconsiderationaremorelikelytosurviveinonegroupthantheother.
TableB1.1providestheestimatesofthethreeparametersforthedistributionsoflaborproductivityoffirmsthatprovidetrainingversusthosethatdonot(column1)andforthebottomhalfversusthetophalfoftheNUTS2regionsintermsofthepercentageoffirmsthatprovidetraining(column2).mestatisticalsignificanceshownisforthefollowingnullhypothesis:Shift=0,Dilation=1,Truncation=0,whichbasicallybenchmarksthecasethatthedistributionsarethesame.
Considercolumn1first.Asmaybeexpected,Shift>0,implyingthatlaborproductivityishigherforfirmsthatprovidetraining.meDilationfactorislessthan1andstatisticallysignificantlyso(atthe1percentlevel).misimpliesthatthedistributionoflaborproductivityismorehomogeneousamongfirmsthatprovidetrainingthanthosethatdonot.Inotherwords,laborproductivityismoredispersedandheterogenousamongfirmsthatdonotprovidetraining.FigureB1.1illustratesthepointgraphically.meresultsarequalitativelysimilarwhencomparingthedistributionoflaborproductivityinthebottomhalfversustophalfoftheNUTS2regionsintermsofthepercentageoffirmsthatprovidetraining(column2).
Tosummarize,trainingprovidedbyfirmstotheirworkersbenefitstherelativelylessproductivefirmsmoreandtherebynarrowsthedispersionoflaborproductivity.Asaresult,trainingallowsthelessproductivefirmstocatchupwiththemoreproductivefirms.miscanhaveimportantefectsonthepossible(mis)allocationofresources,withconsequentefectsontheoverallproductivityoftheregionsandcountries(seeHsiehandKlenow2009;HeiseandPorzio2022).
TableB1.1.Howtrainingafectsthedistributionof(logof)
laborproductivityoffirmsandNUTS2regions
(1)
(2)
Shift
1.973***
(0.249)
2.668***
(0.290)
Dilation
0.866***
(0.021)
0.817***
(0.024)
Truncation
-0.002
(0.006)
.0004
(0.010)
R-squared
0.986
0.984
Observations
17,236
17,292
Source:OriginalcalculationsforthisBriefbasedonWorldBankEnterpriseSurveys.
Note:NUTS2regionshavebetweenabout800,000and3millioninhabitants.
ForDilation,thesignificancelevelisforthedeviationfrom1.Bootstrappedstandarderrorswith500replicationsshowninparentheses.NUTS=NomenclatureofTerritorialUnitsforStatistics.
***p<0.01
FigureB1.1.Distributionoflaborproductivityismorehomogenousamongfirmsthatprovidetraining
5
10
Laborproductivity(logs)
Firmprovidestraining
Firmdoesnotprovidetraining
Source:OriginalcalculationsforthisBriefbasedonWorldBankEnterpriseSurveys.
EnterpriseNoteNo.43
7
Table1Relationshipbetweentheuseofskilledandhighlyeducatedworkersandjobsgrowth
Dependentvariable:
Shareof
university-
educated
workers(%)
Firmemploys
university-
educated
workersY:1N:0
(Marginaleffects)
Shareof
skilledamong
production
workers
(%)
Shareof
secondary-
educated
workers
(%)
Employmentgrowthrate,(%,annual)
(1)(2)(3)(4)(5)(6)
ExporterY:1N:0
Foreign
ownershipY:1N:0
Numberofworkers
(logs)
Shareofskilled
amongproductionworkers(%)
Shareofsemi-
6.787***
(1.673)
10.351***
(2.588)
1.607**
(0.748)
skilledamongproduction
workers(%)
Shareofuniversity
educatedworkers(%)MultiestablishmentfirmY:1N:0
Ageoffirm
(logs,years)
Numberofworkers
3fiscalyearsago(logs)Industrydummies
(ISIC,2digit)Constant
NumberofobservationsR-squared
1.556
(1.877)
-0.438
(0.669)
Yes
4.005*
(2.181)
3,915
0.306
0.085***
(0.025)0.072**
(0.029)
0.166***
(0.012)
0.011(0.030)0.003(0.012)
Yes
3,913
0.170(2.174)
0.148
(2.978)
-6.865***(0.886)
1.715(2.829)2.447*(1.318)
Yes
56.437***
(4.453)
9,233
0.082
-3.132*(1.845)
-0.769(2.661)
-0.163
(0.815)0.074**(0.029)
-1.052(3.070)
-0.088(1.182)
Yes
65.030***
(4.637)
8,344
0.048
1.810**
(0.802)2.438**
(1.169)
-0.026**(0.012)
-0.020*(0.011)
2.078**
(0.834)
-2.352***(0.455)
-1.972***
(0.327)
Yes
15.779***
(2.056)
8,873
0.076
0.981(1.037)
1.254(1.888)
0.024(0.038)3.607**(1.690)
-3.212***(0.775)
-2.517***
(0.452)
Yes
17.678***
(2.770)
3,779
0.127
Source:OriginalcalculationsforthisBriefbasedonWorldBankEnterpriseSurveys.
Note:Huber-WhiterobuststandarderrorsclusteredonNUTS2levelinbrackets.Logit(marginaleffects)estimationincolumn2andordinaryleastsquares(OLS)inalltheothercolumns.NUTS2regionshavebetweenabout800,000and3millioninhabitants.NUTS=NomenclatureofTerritorialUnitsforStatistics.
***p<0.01,**p<0.05,*p<0.1
low-skilledworkers.meshareofskilledproductionworkersisalsolowerforfirmsthatusemanualproductionprocesses.However,thisrelationshipbecomesweakandstatisticallyinsignificantafteraccountingforfirmsize.
Employmentgrowth
Oneconcernisthatgreateruseofskilledworkersislaborsavingandthereforeitmayhinderjobsgrowth.Skilledlaborisoftenaccompaniedbygreateruseofcomputers,robots,andotherlabor-savingtechnologies.Italsoembodiesgreaterhumancapitalthanlow-orunskilledworkers,whichmayreducetheneedforadditionalworkers.However,itisalsopossiblethatskilledworkersmayboostfirmproductivityand
growth,whichmayleadtomorejobsoverall.
meempiricalevidenceontheissueismixedingeneral(see,forexample,BalsmeierandMartin2019;Jungetal.2017)andintheEU-27countries,inparticular.First,controllingforconvergenceortheinitiallevelofemploymentatthefirm,thegrowthrateofemploymentoverthelastthreefiscalyearssignificantlydeclinesastheshareofskilledandsemi-skilledworkersrises(table1,column5).misresultisdrivenbydiferencesbetweenfirmswithinNUTS2regionsratherthanacrossregions.mus,macro-levelstudiesthatexplorediferencesacrossregionsbutnotwithinregionsmaynotdetectalowergrowthrateofemploymentassociatedwithgreateruseofskilledandsemi-skilledworkers.Second,thereisno
EnterpriseNoteNo.43
8
significantrelationshipbetweenthegrowthrateofemploymentandtheshareofworkersthathaveauniversitydegree(table1,column6)orsecondaryeducation.Overall,theevidenceontherelationshipbetweentheuseofskilledandhighlyeducatedworkersandjobsgrowthintheEU–27countriesisinconclusive.
Laborproductivity
Ahighershareofuniversity–andsecondary–educatedworkersisassociatedwithhigherlaborproductivity.However,thisrelationshipisweakandstatisticallyinsignificantatlowerquantilesoflaborproductivity,andlargeandsignificantathigherquantilesinEU–27countries.Forinstance,aonestandarddeviationincreaseintheshareofuniversity–educatedworkersisassociatedwithanincreaseinlaborproductivityby2percentoftheinitiallevel(insignificantatthe10percentlevel)atthe20thpercentileoflaborproductivityandby24.6percent(significantatthe1percentlevel)atthe80thpercentile.mus,itisthemoreproductivefirmsthattakeadvantageofmoreeducatedworkers,whilethelessproductivefirmsarecompletelydeprivedofanybenefits.Assumingthattherearesubstantialgainstobereapedbyimprovingproductivityatthelowend,policymakersshouldtrytoincreaseeducatedworkers,usefulnessoruseotherpolicytoolsforthelessproductivefirms.
AttheNUTS2regionslevel,ahighershareofuniversity–educatedworkersispositivelycorrelatedwithlaborproductivityatrelativelylowlevelsofincome(belowthemedian),butthereisnosignificantcorrelationbetweenthetwoathighlevelsofincome.mus,poorerregionsbenefitmorefromanincreaseinuniversity–educatedworkersthanthericher
regions.miscouldbebecauseofdiminishingreturnstoeducation,giventhatpoorerregionstypicallyhavefeweruniversity–educatedworkers.Anotherreasoncouldbemoreimitationandinnovationpossibilitiesinthepoorerregionsthatcomplementuniversity–educatedworkers.
Atthefirmlevel,laborproductivityishigherforfirmsthathaveahigherproportionofskilledworkersamongproductionworkers,butthisrelationshipisnotstatisticallysignificant.However,acrossNUTS2regions,thereisastrongandsignificantpositiverelationshipbetweenthetwo.Likewise,highersharesofsemi–skilledandlow–skilledworkersacrossNTUS2regionsissignificantlyandnegativelycorrelatedwithlaborproductivity.mereissharpdiferenceintheserelationshipsatlowversushighlevelsoflaborproductivity.matis,attheNUTS2levelandthefirmlevel,therelationshipbetweenlaborproductivityandtheshareofskilledworkersispositiveandsignificantatlowerquant
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