HUMAN CAPITAL AND PRODUCTIVITY GROWTH IN THE ITALIAN REGIONAL ECONOMIES: A SECTORAL ANALYSIS

TitleHUMAN CAPITAL AND PRODUCTIVITY GROWTH IN THE ITALIAN REGIONAL ECONOMIES: A SECTORAL ANALYSIS
Publication TypeWorking Paper
Year of Publication2007
AuthorsS. Lodde
Number2007_11
Keywordsgrowth, human capital, regions, sectors
Abstract

The paper examines the relationship between human capital and productivity growth with reference to the Italian regions. Two approaches can be distinguished. One belonging to the neoclassical tradition stresses the accumulation of human capital as a determinant of growth, while the other, inspired by Nelson and Phelps, emphasizes the role of the stock in developing endogenous technology and catching up with more advanced economies. These hypotheses have been tested at an aggregate level but results might be the overall outcome of different processes across sectors due to the different catching-up potential. In particular we expect the Nelson-Phelps hypothesis to be more relevant in the industrial sector where innovation is the most important growth determinant. A model is estimated which allows to test both the neoclassical and the Nelson-Phelps hypotheses breaking down the analysis by sector. The results do not confirm our expectations. In the industrial sector the neoclassical hypothesis is clearly rejected by the data. Some evidence supporting the Schumpeterian one can be detected when the technical component of human capital is taken into account but it is not robust to changes in the model specification. In the service sector the results are inconclusive as well. A positive and significant effect of human capital accumulation has been found for the whole sector but the explanatory power of this variable decreases considerably in the marketable services branch.

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