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Educational attainment, labour market institutions, and the structure of production

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  • Nickell, Stephen J
  • Redding, Stephen
  • Swaffield, Joanna

Abstract

A key feature of OECD economic growth since the early 1970s has been the secular decline in manufacturing’s share of GDP and the secular rise of service sectors. This paper examines the role played by relative prices, technology, factor endowments, and labour market institutions in the process of ‘de- industrialization.’ We find a statistically significant and quantitatively important effect of levels of educational attainment. Furthermore, the production structure responds differently to the educational attainment of men and women. Finally, countries with stronger levels of employment protection are shown to adjust more slowly to changes in prices, technology, and factor endowments.

Suggested Citation

  • Nickell, Stephen J & Redding, Stephen & Swaffield, Joanna, 2002. "Educational attainment, labour market institutions, and the structure of production," LSE Research Online Documents on Economics 3706, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:3706
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    1. Jo Blanden & Stephen Machin, 2003. "Cross‐Generation Correlations of Union Status for Young People in Britain," British Journal of Industrial Relations, London School of Economics, vol. 41(3), pages 391-415, September.
    2. Bayoumi, Tamim & Haacker, Markus, 2002. "It's Not What You Make, It's How You Use IT: Measuring the Welfare Benefits of the IT Revolution Across Countries," CEPR Discussion Papers 3555, C.E.P.R. Discussion Papers.
    3. Dan Devroye & Richard B. Freeman, 2001. "Does Inequality in Skills Explain Inequality in Earnings Across Advanced Countries?," NBER Working Papers 8140, National Bureau of Economic Research, Inc.
    4. Koeniger, Winfried, 2002. "Defensive Innovations," IZA Discussion Papers 454, Institute of Labor Economics (IZA).
    5. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    6. Martin Conyon & Richard B. Freeman, 2004. "Shared Modes of Compensation and Firm Performance U.K. Evidence," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980–2000, pages 109-146, National Bureau of Economic Research, Inc.
    7. Richard B. Freeman & Ronald Schettkat, 2002. "Marketization of Production and the US-Europe Employment Gap," NBER Working Papers 8797, National Bureau of Economic Research, Inc.
    8. Stephen Machin, 2004. "Factors of Convergence and Divergence in Union Membership," British Journal of Industrial Relations, London School of Economics, vol. 42(3), pages 423-438, September.
    9. Redding, Stephen J. & Venables, Anthony J., 2002. "Explaining cross-country export performance: international linkages and internal geography," LSE Research Online Documents on Economics 2173, London School of Economics and Political Science, LSE Library.
    10. Richard B. Freeman, 2002. "The Labour Market in the New Information Economy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 18(3), pages 288-305.
    11. Freeman, Richard B., 2002. "Institutional differences and economic performance among OECD countries," LSE Research Online Documents on Economics 20063, London School of Economics and Political Science, LSE Library.
    12. Redding, Stephen, 2002. "Specialization dynamics," Journal of International Economics, Elsevier, vol. 58(2), pages 299-334, December.
    13. Cameron, Gavin & Proudman, James & Redding, Stephen, 2005. "Technological convergence, R&D, trade and productivity growth," European Economic Review, Elsevier, vol. 49(3), pages 775-807, April.
    14. Kaitila, Ville, 2006. "Productivity, Hours Worked, and Tax/Benefit Systems in Europe and Beyond," Discussion Papers 1015, The Research Institute of the Finnish Economy.
    15. Jim Foreman & Howard Gospel, 2002. "The Provision of Training in Britain: Case Studies of Inter-Firm Coordination," CEP Discussion Papers dp0555, Centre for Economic Performance, LSE.
    16. Tohari, Achmad & Parsons, Christopher & Rammohan, Anu, 2021. "Capital Fundamentalism and Structural Transformation," IZA Discussion Papers 14444, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    De-industrialization; Educational Attainment; Factor Endowments; Labour Market Institutions; Specialization;
    All these keywords.

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • F0 - International Economics - - General

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