Productivity Growth and Human Capital in Italian Agriculture

Economic literature recognises human capital as a key factor in productivity growth. The objective of the present paper is to verify whether and how human capital influenced the growth of total factor productivity in Italian agriculture. Analysis is performed on a panel of the Italian provinces over the 1951-91 period, the empirical production function being constructed through a DEA frontier approach after testing the input set specification. Subsequently output-oriented Malmquist indexes constructed with and without human capital indicators in the production set are computed. The results obtained show that human capital has not improved the use of agricultural resources directly, as an additional input in the production function; the growth of total factor productivity in Italian agriculture was the result of the accumulation of human capital and not of the initial endowment. Furthermore, human capital acted as a non-neutral production factor and primary education was no more effective than higher education in improving the use of resources in agriculture.